Charles Nenner: "Long-Term Investors
Should Wait Until Dow Hits 5,000"
Submitted by Tyler Durden on 07/15/2010 12:49 -0500
Charles Nenner, who prior to founding the Charles Nenner Research Institute served as a technical analyst for Goldman for about 10 years, has been looking at charts and not seeing much to write home about. In his interview with the TechTicker, Nenner says "I expect the bear market rally to continue for 4 more years, with big upswings like in Japan before coming down again. I don't expect the market to totally fall out of bed. It is going to be very difficult few years to make some money. We will test the lows of 2009 to be tested over the next couple of years. I don't expect the economy to pick up until 2020." How charts can give him macroeconomic perspective with a 10 year bogey, we are not too sure. As to trading, he believes that as long as the S&P does not close below 1,085, the market will continue bouncing, and if 1,085 is taken out "it should be all over." For longer-term investors, Nenner suggests to wait until the Dow goes below its trendline average, with a Dow target of around 5,000. Of course, whether Brian Sack will allow stocks to drop that low is a different matter altogether.
Reuters – Warren E. Buffett ,Chairman and Chief Executive Officer of Berkshire Hathaway, testifies before the Financial …
Fri Jul 16, 6:18 am ET
WASHINGTON (Reuters) – President Barack Obama heard a sobering message from Warren Buffett when he asked for the investment guru's views about the economic recovery, according to an interview Obama gave NBC News on Thursday.
"I'll tell you exactly what Warren Buffett said. He said, 'We went through a wrenching recession. And so we have not fully recovered. We're about 40, 50 percent back. But we've still got a long way to go'," Obama told NBC during a visit to Holland, Michigan, to promote his job creation policies.
Obama chatted with Buffett in the Oval office on Wednesday as he sought ideas on how to translate higher U.S. growth into stronger hiring. This would help him deliver on an election year promise to tackle unemployment currently at 9.5 percent.
Buffett, who built an estimated $47 billion fortune running his insurance and investment company Berkshire Hathaway Inc, warned Obama the recession created a huge overhang of excess capacity in the economy that would simply take time to mop up.
Obama said Buffett specifically used the example of the U.S. housing market, noting 1.2 million new homes were built on average per year in the United States, according to historic trends. That number soared above 2 million during the property bubble, but construction activity has since collapsed.
"What Warren pointed out was, look, we're gonna get back to 1.2 (million). But right now we're soaking up a whole bunch of inventory. So a lot of -- the challenge is to work our way through this recession," Obama said.
High unemployment is another type of excess economic capacity. Obama's Democrats risk severe punishment by voters in midterm congressional elections on November 2 if he fails to convince them stronger U.S. growth means better times ahead.