Dow Headed for 12000?

Those who follow the stock market and invest in it have had consistent disappointment since the beginning of the year. With a few exceptions the Dow has dropped a hundred points a day and is losing a few hundred a day regularly. If the current trend continues the Dow could drop below 12,000 by the end of the week or next week. The drop that started with homebuilders and financials has spread to just about every corner of the markets, even affecting ADRs that are not tied to the U.S. economy.

It has been one blow after another since August, which was pretty depressing as an investor. Seeing the writing on the wall I chose to sell stocks before the end of the year to show some losses for my 2007 taxes. 2008 started worse than 2007 ended so I sold again after the beginning of the year and kept more in cash. After repositioning my assets as far as I am concerned I am ready for it to go down more. Though I would consider myself more of a bull than a bear I have gotten to where I enjoy seeing the daily drops in the markets.

Though it was first resisted, the CEOs and government officials are now admitting the problems at hand. They are now all providing the worst possible outlook so they are covered in the future. Quite a few CEOs in the financials especially have been let go and new management is in place. The new CEOs are trying to find fault in their predecessors and put the worst of it on them so the new leaders can go forward with a clean slate and lowered expectations. Corporate and government leaders are all jumping on the recession bandwagon while it is rolling.

To me it looks like we are already in a recession and I am happy to see all the people scrambling to repair the economy while the markets go down. The actions should provide a bounce in the markets before the end of the year. Are we at the bottom yet? Probably not, but we should be getting close and slowly reentering the markets should provide a chance to catch the bottom and ride back up. Even the recently bullish oil and gas industry has gotten a haircut lately and it is fairly obvious that demand is increasing in that industry.

I would be just as happy to see the Dow hit 12,000 as I was to see it hit 14,000 last October. This is probably the best across the board sale on stocks that I will get for years, and a lot of them will rebound in a short period of time. At the end of 2008 I will have a much better portfolio with better companies than I had in 2007. This is one of the best chances to build a financial future that we have ever had, so I guess you could say my new attitude is being bullish on being bearish.