Unless you have inside information, stock prices are indeed a random walk. They cannot be predicted by past behavior no matter what the technical analysts may try to tell you. It's like looking at clouds. One man sees a mother bear suckling her cub and another espies Ben Hur in a chariot.
The best clues to future stock prices, in my view, lie in macroeconomic data that set the stage for change -- monetary policy, expected government expenditures, interest rates, inflation expectations. The wildcards are geopolitical events, which no one can predict.
The backdrop of these data, not the dismal 2008, suggest an up year in 2009. Indeed, it has already started in 2008, I believe. After all, every day, not just January 1, marks another 12-month random walk around the sun.
I might have been head-faked by the data. Pessimism could be deep enough to prevent a rebound. I would argue, though, that job losses are already baked into the cake and that the grow or die premise of a dynamic society will prevail. The contemporaneous news, such as employment and home sales, could well be dire, but I think the market already expects that and will be looking beyond.
Buy oil, copper, real estate, heavy machinery (I haven't bought in this sector yet), given the stimulus in the background. Alternative energy names should also be a buy if fossil fuel prices rise.
Granted, it's a forecast no more valid than any other, and I know I've said this before, but I'm looking at it as an investor, not as an extrapolator of yesterday or a judge of sinners today. Please, people, get over Madoff, etc. Yeah, he's bad, but being superior about it doesn't feed the admiral's pussycat.
Which brings me to no tears for all the fired coaches in the NFL, or major college football for that matter. They don't do it for free. None will be missing any meals, and spare me all the "we didn't give them enough time" or "he's a proven winner" nonsense. Sure, they coach because they love the game and want to win, but the amount of dough thrown at them kind of insulates the check signer from giving them the benefit of the doubt.
The final game for the Jets revealed the lack of genius in defensive-oriented guys like Mangini. Offensive-oriented coaches who take advantage of the rules will be winners, I believe. The wildcat formation was the difference for the Dolphins, and that was with weak-sister Chad Pennington! Drop-back, pocket passers are passe, to coin a phrase.
A backfield of Thomas Jones, Leon Washington and, dare I mention him, Michael Vick would hang half a hundred on most NFL "defenses" given blocking rules as they now exist, which virtually permit holding on every play.
Just watch the bowl games this holiday season for a view of the world to come.
Best wishes everyone for a happy and prosperous new year each and every day the earth manages to turn on its axis and orbit the sun.
Update on Kev's portfolio. Don't sue me if you lose your shirt. I'll be shirtless as well.
Ford (F) Sold at $2.15 on 12/24/08, gain of 46.5% booked from purchase at $1.15 on 11/20/08.
Advanced Micro Devices (AMD), bought at $2.19 on 12/15/08, down 1.4% at $2.16 on 12/31/08.
Palm Inc. (PALM), bought at $2.04 on 12/15/08, up 50.5% at $3.07 on 12/31/08.
Developers Diversified Realty (DDR), bought at $4.86 on 12/31/08, up 0.004% at $4.88 on 12/31/08
PowerShares DB Crude Oil Double Long ETN (DXO), bought at $2.24 on 12/29/08, up 13.8% at $2.55 on 12/31/08.
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