Sticking to a Dow 20k call

You know what I hate? When people say: At least you don’t have a brain tumor.
For one thing, how do they know I don’t have a brain tumor? Maybe I do have one and it’s worse than their friend/relative/loved one who has a brain tumor. Maybe I’m riddled with brain tumors. What does that have to do with the stock market?

Like everyone else, I was stressed Monday. When SPY bounced from 117 to 118 I thought: Looks like the market is bouncing, maybe it will even close positive. SPY (which is the ETF for the S&P 500), closed at 112. Pathetic. I was wrong. On the day.

And yesterday was the bounce-back. Will the rally last? It should. It will. Here’s why:
- Every piece of government data shows expansion. You can’t find one piece of government data that suggests recession. All the Roubinis of the world are feeding off fear but can’t find one piece of actual data to support their cause.
- Private sector jobs actually grew 154,000 in July (up from 80,000 in June). How do you downgrade that?
- Claims for unemployment insurance fell back to 400,000 in July. Down from 478,000 in June.
- All the “soft patch” caused by Japan’s disaster is coming roaring back.
- Pending home sales? You would think they were crashing just like in 2008. But no, they are up 11% in the past two months.
- Withholding taxes are up about 2% in the last month. Taxes don’t lie. People don’t want to pay them and they are still up. Heck, the IRS seizes my accounts every few years or so. I hate paying taxes but I still do. Eventually.
Anonymous people on message boards get to bring out their full glory now that nobody knows who they are. They say things like, “Hey, James, where’s your Dow 20k call?” They are laughing in their little closets while they type out Twitter messages on the last computer they can afford: a TRS-80 from 1983. Well, “my” Dow 20k call is in the exact same place. In my head and heart and soon to be in the markets. The Dow was cheap two weeks ago and it’s even cheaper now.

You’re going to let some rogue ratings agency like the S&P scare you out of buying AAPL at 10x earnings, MSFT at 10x earnings, INTC at 8x forward earnings when tech is booming more than ever?

Or how about the banks: They can borrow at 0% and lend at 3%. You think that’s a bad business? Maybe you should sell it?

Don’t be scared by ghosts in your closet. You’re not a little boy or girl anymore. This market is going to turn from a ghost into a monster. And then we’re all going to be scared at the destruction among short-sellers it leaves in its path.
By James Altucher