Friday, October 10, 2008

Prediction comes to full fruition: Dow passes 8500

Who woulda thunk it? Maybe I should stop calling my long-term forecasting method "experimental" and move on to "working prototype."

9 comments:

Dan said...

so is it time to get back in?

Jody said...

No, I don't think so.

Dan said...

Jody,

Ok, thank you - I'll stay tuned.

wooderson316 said...

Is your forcasting method simply to take the existing dividend and divide by .03 to get the "fair price"?

If not exactly that, what is your method?

Jody said...

No, it has nothing to do with the dividend yield - as far as I can tell it's a coincidence that they agreed this time.

I can't say what the method is, because I'm starting a newsletter soon that will use that and several other factors to time the market. I don't want to get scooped!

Culver said...

Hi Jody, et al.

I thought this link may be of interest, http://www.generationaldynamics.com/cgi-bin/D.PL?s=AzIjH9&d=ww2010.i.djia
It follows the daily close of the DJIA since 1929, and it's ratio to the longterm trend of the DJIA (the trend appears to be an annual growth of 4.67%). Assuming his trend is correct, then, as he/she implies with mention of "mean reversion", the DJIA has to spend considerable time below the trend value to balance the time spent above the trend during the recent bull/bubble market.
Cheers,
Aaron

Jody said...

Aaron,

Yes, I'm familiar with this concept. I don't agree with the theory that the market "has" to dip below the mean trend for an equivalent amount of time, but I certainly agree that it eventually will, and that it will result in very cheap stocks and mouthwateringly high dividend yields.

Tim said...

Maybe you should call your newsletter "marketimer".
When you say time the market do you mean within weeks, months or years?
If you start a newsletter does that mean no blog?

Jody said...

Well, there's already a pretty famous newsletter by that name.

I will actually have more things going than just this blog, and the most important content will be provided to subscribers.