Masters said U.S. stocks are earning twice as much now as they did around the 2000 top, and the companies have about half as much debt than they did in 2007. The fundamentals underpinning the valuations of stocks today are quite strong, he said. The reason why were ahead of where we originally expected to be is because the economy approved a little more than we expected and also because P/E ratios have normalized more quickly than we thought. Also, balance sheets are extremely strong. Today, stocks are trading at about 15 times earnings, but around the 2000 top, they were trading at 25 times earnings, Masters said. Forecasting Dow 20,000 in 2014 may seem like a provocative assertion — and perhaps guaranteed to attract attention — but Masters is not the first prognosticator to call for it. James Altucher, an investor, author, entrepreneur and managing director of Formula Capital, made the same assertion last March in an interview with Yahoo, also concluding that stocks are not trading at overvalued levels. But when the Dow does hit 20,000 in 2014 or early 2015, Altucher predicted it would be time to take some chips off the table. [By] 2015, 2016, Im getting nervous. I want to be in cash. Read Latest Breaking News from Newsmax moneynews/InvestingAnalysis/Masters-Dow-20000-2014/2013/12/13/id/541658?ns_mail_uid=1757938&ns_mail_job=1550111_12142013&promo_code=15F19-1#ixzz2nUOklNPF Urgent: Should Obamacare Be Repealed? Vote Here Now!
Posted on: Sat, 14 Dec 2013 22:04:37 +0000
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