timwest
Short

DOW INDUSTRIALS MONTHLY 100 YEARS CHART TELLS US TO ....

INDEX:INDU   DOW Industrials [Test]
2680 35 39
BUY STOCKS, INDIVIDUAL STOCKS, NOT THE MARKET. But I explain this at the end.

First, thanks to TradingView user russ             .brown.52 for putting up your long term trendlines chart on the DJIA             . I decided to add some internal trendlines (in green) that capture the movement within the extremes of price. You can see that those internal trendlines are just under the current market from 14000-9000, but rising steadily.

I then added some important points about how the FED has acted strongly to avoid the DISASTER that we experienced in the post 1974 environment for the stock market where inflation ripped apart the values of stocks by over 64%. Although most people argue that current inflation rates are much higher than are reported, keeping rates lower than historically normal has kept the system afloat and awash in cash and credit.

I then added the market cycles from 1942-1981 and 1981-present are very similar and fortunately for me I found the pattern in 2001 and have been able to find innumerable comparisons and unreal similarities of those two time frames. Although I missed publishing a book to announce to the world, I did present my findings to hundreds of people through my investment group, presentations direct to hedge funds and many individual investors over the past 13 years. I encourage you to read the books by Harry Dent. His books go a long way towards explaining the population cycles that drove this pattern. In short, we face the headwinds of people leaving the workforce in the next 10 years and the costs of caring for our elderly population. We also face the lack of spending from large family households going forward, which will restrain economic activity for well over a decade.

I hope you can take away from this chart that it is important to understand the long term cycles driving the market. I would add that it is important to begin to hedge any risks associated if the market were to return to its long term trends. The market is poised to drift sideways to up 30% for another 10-20 years and confound a majority of people. This chart shows us that we need to find other ways to grow our retirement portfolios because the average stock is not going to generate a big enough return. We have to find growth stocks that can increase by multiples as opposed to earning 3%-6% at best in the stock market for the next 10-20 years.

So, thank you to the FED for doing everything you could to keep from repeating the pattern of the past. And sorry to the savers and the retirees who have had to suffer because reported inflation is not keeping up with real-world price increases and for not being able to earn a decent return from your savings in the bank.

Thank you to those that fostered and encouraged the growth in the internet and all the technologies that support it. The internet is simply the greatest wealth building "FOUNTAIN OF WEALTH" since the internal combustion engine and electricity.

Tim West
Comment: Reagan took over in January 1981. Notice the similarity to today (Jan 23, 2017).
Comment: As Reagan took office, after a sizable 10% rally from the election lows in November at 924, there was a drop from a peak at 1021 down to 787 (-234 points or 22.9%) in the DJIA after Reagan took office, but then there was upside to 2700+ by August 1987.
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Hey Tim, I've got a Question . In order for the market to return to it's Bull Uptrend , Should The Cycle Repeat Itself , implying that New Technologies have to be invented & new businesses have to be created.
If I understand you correctly , you are saying that this time round The Cycle restart may be delayed because of Fed's Action & The Demographic Cliff that Harry Dent is warning us ! Am I right ??
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timwest PRO harsha.imperial
Thanks for your question. I believe the overall market will have limited return but individual growth names still have a chance. You have to wander out into growth areas to profit. It means you have to look for real growth and not just "population and inflation" growth to help grow your portfolio. Technology is what creates the biggest moves in the market in my opinion and demographics is right up there next to it in importance. The Gov'tsof Japan and now China understand this and have been pushing as hard as possible now to grow their population since many nations are facing a demographic downslope going forward. In order to make profits, you have to find a long term growth stock and take some risk because the future is always uncertain with growth names thanks to competition and new technology. Tesla is a great example: It's a massive growth trend, but you have to invest while they are losing money. Look at AMZN also, it has been growing very fast and barely profitable, but the stock is growing strongly because they are actually free-cash-flow profitable (which most people don't seem to notice). You have to have a long term time horizon AND be willing to suffer large drawdowns in the paper value of your portfolio to be successful. Watch the core or sales, cash-flow and working capital in your stocks and make sure they are staying lean financially and disregard the stock price all together. As for Harry Dent - the demographic cliff is holding back the economy.
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Thanks for ur Analysis Tim !
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Tim, I would like to THANK YOU SOOOO MUCH for what you do here on the Tradingview. I've been on the site for about a month and I am following you and I feel so lucky that somehow I found this site and especially you.
Keep up the good work and please know that we very much appreciate your hard work.
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charttrader PRO misha.spiridonov.79
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timwest PRO misha.spiridonov.79
@misha.spiridonov.79, You are very welcome! I'm quiet lately in publishing, but active in the Key Hidden Levels Chat Room.
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Small caps, venture cap and private start ups seem like all the places to look for outperforming alpha when the market markets go sideways...
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I could add a little clarity = "Thanks Banks (NOT)" for robbing everyone blind to cover up your hundreds of billions in losses from "portfolio holdings of real estate mortgages". Banks charge 4% interest to people borrowing to buy mortgages and pay zero to savers who leave their money in banks. Brutal reality. Either borrow and buy assets to make a higher return or get zilch for lending your money to the bank.
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Nice to hear of another Harry Dent follower .
I also agree on silver since- it has more uses then Gold - including medical - and it is being used up rather then being stored ...
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Yes - Harry Dent has nailed a lot of major market calls. I saw him on NPR in 1989 and he outlined his demo-econometric-models and I was hooked. His work presaged many great market observations for me. I've given many presentations on his work over the last 13 years... Most people still don't believe what he is saying, which is a shame, but it is becoming more mainstream as each day passes. 46 year olds do set the pace for the economy and the birth rate plunging from 1964 to 1975 and flattening out from there really suggests flat economic performance for many years (decades) since 1964 = peak of 2010 and 1975 = trough in 2021 = another 7 years of rough going. Population rates stay flat from 1975 forward.
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