First things first … If any of you do not know the name Nouriel Roubini, you should. Perhaps you know him as Dr. Doom? This economist gained fame and his nickname because he “accurately” predicted the collapse of 2008 (in 2005). Since March of 2009, he has been predicting a major market collapse (DJIA will drop to 1,000). I have tracked him not because I believe he is smarter than any other economist, rather, I have followed him because it is amuses me to watch these “iconic” economic figures play the role of the grand oracle. Trust me folks, these guys and their computer models are wrong so much that it is actually amusing. Anyway, Dr. Doom is changing his tune. In an interview with Steve Forbes (another iconic loudmouth), Dr. Doom now says that both the market and the economy have an oh-so slightly brighter future. In fact, and here is the kicker, Dr. Doom just bought a $5 million condo in New York City. I guess he believes the real estate market is no longer a force in decline. The bottom line is that folks such as Dr. Doom and Steve Forbes make fortunes from playing the role of Chicken Little. Enough said.
WASHINGTON – Industry economists say the U.S. economic recovery is gaining strength, with more firms expressing positive hiring plans than in over a decade. A new survey from the National Association for Business Economics finds that economists are more hopeful about overall economic growth, the job market and demand for companies’ products and services by many measures than they have been since the start of the Great Recession. The survey found that business decisions are now being driven by the fundamentals of an improving economy.
Once you get past the horrible writing above (professional writers today, egad!), the message is clear, and it is the same message I have been sending since the end of last summer – get aboard the train or you will be left at the station wondering (and upset) how you managed to not get there in time. As I wrote a week or so ago, the drivers of both the economy and the market are now fundamentally driven (finally), which means that slick oracles, such as Dr. Doom and Steve Forbes can now begin to predict a bullish future, one that is long, not short, which, I am sure, matches their investment strategy perfectly. I guess I do have more to say about this “phenomenon” after all.
Back in early 2008, a friend of mine and I met regularly just to discuss the economy. At that time, he predicted the economic collapse (I did not see the breadth and magnitude of it) and he predicted it because he so clearly understood the “toxic asset” problem that was slowly simmering. I guess this makes him as smart as the university professor, Dr. Doom. And not to toot my own horn, but my friend and I started our discussions back in late 2004 because I predicted to him that the overheated real estate market would collapse within two years. To prove my certitude, over the next year I sold my real estate holdings. Yes, I screwed up. I could have had one more year of appreciation. In any market, though, take profit when you can, especially if you see the train swerving off the tracks.
Trade in the day; invest in your life …
