Thursday, April 26, 2007

Dow at 13,000: Markets Rise in Heavy Volume

Without a doubt, one of the greatest things about the Internet, is that it provides the average investor the means and information to trade stocks online. I have availed myself of this oppotunity and been a student of disciplined investing for a number of years, long before I ever dreamed of blogging. I would probably be a better blogger, were I not committed to spending a part of every online day investing, doing research and reading lots of stock charts.

For the record, I'm an IBD woman all the way. After that, I'm a Coolcat kind of investor.

Larry Kudlow is someone I admire and respect who comments daily on the markets. His latest post on the dazzling market rise follows:

"There is a simple explanation behind the stock market boom that is pushing the Dow over 13,000 into record territory—profits are high and interest rates are low. These are the two main drivers for stock market value. When you combine them into capitalized profits (using the 10-year Treasury to discount earnings) what you find is this:

"From the bottom, capitalized profits have increased 197 percent. But stocks have increased by roughly 90-100 percent. Therefore stocks have value. Stocks are cheap. Add to the mix a strong dose of record low tax rates on investment capital.

"Barring some terrible outside shock, the market can keep rising for years.

The stock market is still the greatest story never told."

No comments: