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Friday, February 1, 2013

THE DOW AT 14,000

A week ago I indicated that the Dow Jones Industrial Average would return to the 14,000's.  This happened  today.  The all time high occurred on 11October2007, but slipped to 6507 on9March2009.  The market has, thus, jumped by a factor of 2.15 from this trough to today.  It was around this period four years ago that I decided to initiate my Blog Stock Challenge.  
My challenge, however, did not pick the best possible stocks.  In the spirit of saving Planet Earth and Humanity, I selected those companies having some influence over the future of sustainable resources:

  Microsoft (software for renewable energy)     20.25     27.92
  GE (they invented the modern wind turbine)  16.67     22.52
  Lockheed Martin (doing OTEC R&D)             77.13     87
  Boeing (hydrogen  jetlliner)                           44.17     74.77
  Ultra Basic Materials (a materials company)  13.37     39.66
  Ford (methanol cars)                                     1.90     13.05
The value of each company has, of course, increased, but when you crank in the shares purchased, my real ratio of increase today is at 2.68, better than the average expected increase.  This is all the more remarkable because Barack Obama had been elected President, and it was clear that we would abandon the Middle East Wars.  Defense companies were almost certain to be hurt, so it was insane to invest in firms like Lockheed Martin and Boeing.  But I did anyway.  I guess the military industrial complex turned out to be more formidable than I speculated.  Great for my stock value, but bad for world peace.

Almost a year before all the above, during the heat of the campaign for the presidency, my first Huffington Post article was entitled:

Barack Obama had not yet prevailed over Hillary Clinton, and my original HuffPo was a message for world peace.  I posted several other "peace" articles, with the latest being two years later on

I almost wanted my stock worth of these "war" companies to drop.  Alas, I made money on continued war.
The whole point of this discussion is TO INVEST WHEN THE MARKET IS DOWN.  Take Ultra Basic Materials (UYMan ETF, exchange traded fund), for example.  I bought just after the crash:

So UYM can still go up.  Ford, has been my sensation.
I expect a correction of 1000 to 2000 points sometime this year as the world economy is dangerously metastable.    Will we again see anything below 10,000?  I know people who are predicting true doomsday, purchasing an arsenal and maximizing their survival capabilities.  On the other hand, this nipping at 14,000 is pure irrational exuberance, I don't think this mini-crash will be all that bad, but pick your trigger:  Israel bombing Iran, Peak Oil, crash of the European economy, crisis in China...


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