James Altucher’s Outlook on the Stock Market

Oct 9, 2011
J. Webster
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The ever interesting and insightful James Altucher does a question and answer session once a week on Twitter, here he answers a question about the stock market’s outlook for the next six months:

@artling asks: What do you think the outlook for the US market will be in six months?

ANSWER: I can answer with a question: why would the US market go down? We just had good employment numbers this morning. Companies like Apple, Microsoft, Exxon, and Intel, all trade for less than 10 times forward earnings (historical average is 15 times earnings) and they are all growing (Apple has grown 124% year over year), and they all have enormous cash.

Let’s look at all the leading indicators that suggest the economy will be good 1 – 6 months from now:

  • rail traffic: up
  • hotel occupancy: up
  • retail sales up: 4% year over year
  • ISM manufacturing above 50, saying the economy is still expanding
  • unemployment claims at lowest level since May 2008
  • existing home sales up 18% year over year while housing starts at a low (i.e. demand is up but supply is up so housing prices should go up)

I can go on and on. And the stock market is not necessarily related to the economy on a daily basis but I do think the worst is behind us. And the market is in bear market territory (or has been) so now we should get a strong bull market move and then we have an election year which should be good. Also, when Zynga, Facebook, etc start going public that should be strong for the stock market. And finally, when banks start lending the $1.6 trillion they have in reserves (and commercial lending is already back full force) then that should be good as well.

So basically: I think the US market is going to go straight up.

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