Goodbye October, Hello Rally? Big Money Sees Dow Up Another 14%
Posted Nov 03, 2008 10:38am EST by
Aaron Task
in Investing, Recession, Clean Tech
Related: KDN, ADM, CMG, ^dji, ^gspc, ^IXIC, SPYOctober
was one of the worst months in market history,
but ended with one of the best weeks in market history. Stocks advanced
early Monday as November trading gets underway, and the conventional
wisdom on Wall Street is the pre-election rally will continue.If Barron's "Big
Money" poll
is right, the Dow will end the year at 10,642, a 14% gain from Friday's
close. Some "remarkable bargains" were created by the market's rout,
says Jim McTague, Barron's Washington editor, citing food giant Archer Daniels
Midland and engineering firm Kaydon as examples. (McTague does not own shares
in either company.) McTague
notes the kind of "naked panic" seen in September and October typically
occurs at major turning points. Specifically, he cited the spike in
outflows from U.S. equity mutual funds of nearly $50 billion combined
in September and first two weeks of October, according to
AMGData.com.Historically
speaking, mutual fund investors are terrible market timers -- selling
at bottoms and buying at peaks -- and the "smart money" on Wall Street
is betting retail investors just repeated that inglorious pattern
