Sunday Morning Coffee

The Barron's cover story was called Enter the Bull and tried to make a case for Dow 15000 within two years based on data related to market cycles going back to 1871. That is only 15% from here and if my range busting rally theme for 2012 comes to fruition (big, fast rally that then mostly retraces) then we could touch 15000 pretty quickly so I don't think the call is particularly outrageous.

Also in the article was the "50/50" chance of the Dow getting to 17000 in the two years which got ripped up pretty good in the comments because essentially just about any conceivable outcome has a 50/50 chance of happening.

Either the Dow will go to 15000 or 17000 on the timeline suggested or it won't but I would point out a couple of issues with this type of study. I believe in understanding how cycles tend to work because there are tendencies that often repeat. Often does not mean always but there is something to it. However I can't see the utility in incorporating stock market results from the 1870s and 1880s when twine and cotton companies were the market leaders.

I don't know at what point exactly that historical data is useful for these purposes but at a minimum if the year has a one and an eight in front of it, I don't think there is any relevance whatsoever. Obviously if you disagree then you might give the cover story more credence.

The other issue I would raise is the extent to which the argument presented pays no heed to fundamental current events. I am not making a bearish argument here (I'm not making a bullish one either), simply pointing out that any investment case, even a broad one, should take into account the current fundamental environment. To me this equates to buying a stock solely for the valuation with no heed to the state of the industry. I imagine the TV stocks were all very cheap at one point (there was a TV stock mania in the 1950s).

I did like the Bruce Lee reference in the title though.

Finally some fire department business. In order for Walker Fire to keep up with how the fire industry is evolving we had to buy a vehicle for fighting structure fires. Our previous orientation had just been wildland in terms of our vehicles and our training. This is changing. We have nine firefighters going through structure training over the next few weeks and the truck pictured will be Engine 86 once it is fully stocked.

Engine 86 is a 1986 International that we bought from out of state and it is in fantastic shape (no rust coming from back east) with very low mileage. It was obviously babied and given that we had to do something we really lucked out. The new truck will play a huge role for us.

You probably know where I am going with this. The truck cost $30,000 and we have allocated $10,000 more for stocking the truck with hose, nozzles and other equipment. In the past, blog readers have been very generous toward the department for large capital outlays like this and I hope that will be the case again.

There are two ways to donate. Our web page can accommodate credit cards or a check can be sent to;

Walker Fire Protection Association
5881 S Walker Rd
Prescott, AZ 86303

The website does not allow for specifying the reason for the donation and there can be no guarantee that the check memo will be looked at but there is a way to track how much comes from the blog that I would ask anyone kind to make a donation to do. Whatever dollar amount you would consider please add $0.50.

Joellyn and I will be donating $1000.50. The $0.50 will allow for tracking what comes in from the blog without anyone needing to deal with designated donations. I do not take this sort of thing lightly and I hope I do not create the appearance of taking blog-reader participation for granted but the group has shown a generous willingness to participate before. Thank you and please donate.