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Friday, July 10, 2009

2009 predictions revisited, half way to hell

Earlier in the year, I created two entries on Market predictions, one for general 2009, one for 2009 market trends. Time to keep me honest, see where I was on target, where I was close, and my TBD (or so far misses).

Overall, I think I did pretty well. Between predictions met, and near misses, I bet I did better than the Wall Street Journal, New York Times, Jim Cramer, Warren Buffet, etc. Too bad my income doesn't match theirs! Judge for yourself! Remember, I take no pleasure in being right with the pessimistic outlook, I hope I am wrong! (read)

2009 predictions met
  • Obama cannot save the USA and the world in 2009. (proven in short order
  • Unemployment will hit 8% in 2009 in official figures, unofficial (REAL) numbers easily top 12%
    Real unemployment officially at 9.5%, unofficially easily at 11%
  • All countries will continue to race to devalue their currencies. The race to devalue will help ensure the US Dollar doesn't collapse as compared to it's peers.
    I can't count this as done, until Dec 31st, 2009, but so far, this has held true.
  • More insurance companies will have severe financial issues.
    Check, read the blog for 2009, more to come.
  • Oil will hit 50 bucks a barrel in Q1 2009. Oil will hit over 60 a barrel before EOY 2009.
    Check, hit 49.47 in Q1, it hit about 67.56 bucks a barrel in Q2 (both hit higher in reality)
  • With all this doom and gloom, predict the market WILL RALLY, sometime in Q1/Q2, and fool people into thinking the market has recovered before failing again. From 2009 market top to bottom will exceed 50%. (hence why I am long currently resource stocks/oil)
    MAJOR check, even I was nervous as you can see by my blog!
  • Oil will go up on Q1 of 2009. Oil as it is priced right now is a great buy for people wanting to buy & hold for 10 years. It may be a buy of a lifetime. Thats not to say before 2009 is out that oil can't hit lower than current.
  • Oil for shorter term traders, on the pop up in Q1, will sell significantly out of this trade. Oil went straight down from 140 to 36, it needs a counter rally.
    Check, oil hit over 67 a barrel, as previously mentioned.
  • The market will have a rally over Obama and his policies to save the world as the new savior. The rally (or trade sideways, lack of collapse) will last into Q2
    Check, we are in q2, rally fading.

These are near misses so far, and we are 1/2 way through 2009
  • DOW will hit below 6,000 (I'll take ANY bet on this one). And it wouldn't surprise me to hit DOW 4,000. (over 50% drop from current position)
    DOW hit
  • The housing collapse is 50% there, as per my previous entry. The NorthEast will see acceleration as the financial market layoffs take effect in the region.
    Not yet achieved, but cracks are appearing
  • Gold, Oil, and resource plays are NOT guaranteed safe heavens, but over all investments, it will fair pretty well compared to the alternatives. See previous bullet as to why. GDX will hit 55 a share in 2009, wouldn't surprise me if this occurs in Q1.
    NEAR miss (so far), GDX hit 44 in Q1. GDX opened at 33.33 on Jan 2nd 2009.
  • Counties and states will face financial crisis, as many as 5 counties will outright fail in 2009, causing municipal bonds to sway.
    Patience, many counties are on the brink, as reported in the news. Many taking drastic action, some have failed, but I wouldn't say "many" yet.
  • The ETF SRS will hit over $200 a share in 2009, currently at $53. May hit $25 before $200. Over $500 a share would shock me.
    Half way there, SRS hit 16.80 a share, NEW 2009 target is 134 a share (8X the low)
  • Stock DECK (at 80 now) will trade at below 25 a share by Jan 2010 (may need extra month for earnings report)
    Near miss Went to 37.25, I still contend below 25 for 2009.
  • Gold valuation is unknown for Q1/2/3. Long term Gold is a great buy here again, and will be higher in the next 2 years. GDX is is currently at 33, and will hit over 55 in next Q1/Q2, target is close to 100 in 2009. This will be due to golds high price, but low energy costs and cheap labor (other miners such as copper laying off in droves).
    I didn't realize that I repeated my self so much between both blog entries! hit 44
The jury is still out
  • Deflation will "win" in wages, stocks, and real estate.
  • Inflation in Gold, Oil, or Food, will occur in 2009.
  • If gold collapses, will recover by Q4.
  • In Q2, the market will pull back, sucking the bears in for the short of a lifetime. They will be disappointed as the market rallies back in Q2/Q3 and hurts the bears.
    Oh god, I hope I was wrong! Because I am the sucker I predicted!
    (CLICK for UPDATE 7/16/09)
  • After the rally of Q2/Q3, the market will finally collapse to new lows in Q3/Q4.
    This one I still agree, Q4 lower than now. Time will tell

2009 Revised predictions

The politicians will continue failed policies of ignoring losses, illegal (but legal) accounting for companies, the US Fed giving trillions of US Taxpayer money (illegally according to the constitution) to private industry. Where the US and world financial system is headed I wouldn't wish on my worst enemy. The US is in the middle of a collapse, not the end, and the US will continue to be a battle, but I will not try to play for the rebound.

The best news I can say is, other world entities are just as screwed up, and many more so. So on a world balance, I may be a tad over-pessimistic. DOW target still 5K, but 4K is possible for 2009.

If superstitious, the recent SP & P 500 market low was 666, may be a prediction of where we are going, hell in a handbasket.

From WebSurfinMurf's Financial Blog

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