The Stock Market Could Go Either Way
Wednesday, December 5th, 2007
By Mitchell Clark, B.Comm. for Profit Confidential
One of my favorite companies just split its stock two-for-one. LKQ Corporation (NASDAQ/LKQX) operates in the auto parts business, which, I have to admit, is a somewhat unexciting and mature industry.
It doesn’t really matter in this particular case — the stock doubled this year.
Another company that continues to be an outstanding wealth- creator for stockholders is an old favorite, New Oriental Education & Technology Group, Inc. (NYSE/EDU). This stock is up over threefold since I first came across this company. There’s no doubt it is expensively priced, but it is likely to remain expensively priced, as investors continue to put money into well-managed China growth stocks.
As I wrote previously, I still feel the stock market is at a crossroads right now. We are close to a turning point that could go either way.
In my experience, for the most part, stock market participants tend to be an optimistic group and they want to bet on a brighter future. Sentiment is quite fragile right now and I firmly believe that it’s equally probable that the stock market will either resume its downtrend or develop a new, more positive trend going into the New Year.
What I don’t expect is any runaway market for stock prices in either direction. I think this is a view held by many on Wall Street.
The Dow Jones Transportation Average, which is always an important benchmark, doesn’t look too healthy in this market. A quick look at this index reveals that its most recent trading action is virtually identical to its performance in mid-2006.
One thing’s for certain, there is precious little time left for the important benchmarks in the marketplace. Either we get a reversal soon, or we might get a much worse breakdown in stock prices.
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Tags: China's Growth, stock market, stock prices
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.



