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John Rogers
By admin - Posted on September 12th, 2007
Tagged: The market has gone haywire. Subprime fears have made financial stocks even more volatile. This pinball effect is leaving many investors feeling skittish about where to put their money. During tough times like these John Rogers of Chicago-based Ariel Capital Management likes to stay focused on the areas he knows best, which keeps him calm and confident in his decisions.
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The market has gone haywire. Subprime fears have made financial stocks even more volatile. This pinball effect is leaving many investors feeling skittish about where to put their money. During tough times like these John Rogers of Chicago-based Ariel Capital Management likes to stay focused on the areas he knows best, which keeps him calm and confident in his decisions.
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By admin - Posted on January 12th, 2007
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Wall Street's darling is back: Goldilocks, whose economy is neither too hot nor too cold, but just right for optimistic investors. Inflation is under control, earnings are still strong, the outlook is for solid growth. That's why we're in the second-longest rally since 1929, at four years, three months and counting. Since July 2006 in particular stocks have rocked.
Investors Intelligence, which polls Street sentiment, reported recently that 60% felt bullish and were convinced the economy is just right. The run has lulled investors into a false sense of security. After all, Goldilocks was no saint. She broke into someone else's cottage, stole their porridge and busted Baby Bear's chair. As a contrarian, I have always related better to the bears. They are the ones who recognized something was not quite right. That is how I feel as we start the new year.
A correction is inevitable. I'm anticipating at least a 10% market drop sometime this year. Why? Earnings expectations are overly optimistic. After increasing 20% in 2005 and 15% last year, Wall Street is still banking on 10% earnings growth for 2007, double the historical average. But economic expansion is projected to slow to 2.5% in 2007, down from 3.3% in 2006. The smart money knows it is not possible for corporate profits to outpace the underlying economy for very long.
Wall Street's darling is back: Goldilocks, whose economy is neither too hot nor too cold, but just right for optimistic investors. Inflation is under control, earnings are still strong, the outlook is for solid growth. That's why we're in the second-longest rally since 1929, at four years, three months and counting. Since July 2006 in particular stocks have rocked.
Investors Intelligence, which polls Street sentiment, reported recently that 60% felt bullish and were convinced the economy is just right. The run has lulled investors into a false sense of security. After all, Goldilocks was no saint. She broke into someone else's cottage, stole their porridge and busted Baby Bear's chair. As a contrarian, I have always related better to the bears. They are the ones who recognized something was not quite right. That is how I feel as we start the new year.
A correction is inevitable. I'm anticipating at least a 10% market drop sometime this year. Why? Earnings expectations are overly optimistic. After increasing 20% in 2005 and 15% last year, Wall Street is still banking on 10% earnings growth for 2007, double the historical average. But economic expansion is projected to slow to 2.5% in 2007, down from 3.3% in 2006. The smart money knows it is not possible for corporate profits to outpace the underlying economy for very long.
