Stock Market Comments: Compelling Value In Large Cap? We Think Not

by | Jul 19, 2011 | Point and Figure, Stock Market Comments

Weekly Commentary for July 19, 2011

A few weeks back I wrote “there is a possibility this is how the stock market could move (sideways) for awhile.”
It’s possible we could see five, six or seven weeks of sideways or straight up, followed by five, six or seven weeks of sideways to down.

So yesterday, I’m driving to a meeting and I hear this financial planner being interviewed on Bloomberg radio.

When I heard what he said, I almost drove off the road.

He was saying all of his clients needed to be heavily invested in emerging stock market debt and large cap stocks.


He spoke about how, fundamentally, these emerging markets were a “compelling value” at these levels. And the same was true, he said, about large cap stocks.

Wow again.

Putting the charts aside, I don’t know if I really want to own the debt of ANY country at this time, including emerging markets.
But my question to this planner would be, is a “compelling value” enough to make people want to invest in something like that?

What will make them go up?  I mean, suppose prices of these things fall from here, does that make these investments a “better” value?

You know, it’s funny.
These point and figure charts I use to manage your investments can only move up when the price moves up.
There is no other way.

And the price moves up when more folks are buying.  Period.  There is no talk about “compelling values.”

Intermediate indicators have flipped to positive (offense).
This means we begin to push some chips back on the table.
Even though it appears counter-intuitive, the discipline tells us this is what we ought to be doing at this stage of the game.

If you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before making ANY investment decisions. If you do not have an investment adviser, we encourage you to contact Mullooly Asset Management at 732-223-9000, or through our website. Under no circumstances should the content discussed on this post be considered specific investment advice.

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