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http://www.marketwatch.com/story/rea...els-2010-12-24
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — News flash!
The Great Recession has now been completely overcome: The United States economy is today back to where it stood at its peak prior to the Great Recession of 2008-2009.
To be sure, you won’t see any press releases announcing this momentous occasion. That’s because the government doesn’t report the value of the gross domestic product (GDP) on a daily or even weekly basis. The GDP is instead reported quarterly, with a sizeable delay.
Still, according to Norman Fosback, editor of Fosback’s Fund Forecaster, who discussed the size of the GDP in the latest issue of his advisory service, we can extrapolate the government’s latest GDP numbers to estimate where we are today.
And, he said in an email earlier this week: “As of this moment, we are virtually right there: a 100% recovery” in real, or inflation-adjusted terms, of where the economy stood at its pre-recession peak. “And if not, then a couple or a few more weeks at most.”
You’d think that the complete recovery from the worst economic downturn since the Great Depression would be big news.
But you’d be wrong. As far as I can tell, it hasn’t been widely picked up by the mainstream press.
Why?
Therein lies a tale, which Fosback finds very significant when assessing the stock market’s potential. The lack of attention to the magnitude of the recovery has been caused, in his opinion, by “the extraordinary pessimism enveloping the consumer investing population, fanned by a fear-mongering financial media.” That skepticism, in turn, has played a big role in holding the stock market back from even bigger gains in recent months.
For example, as Fosback points out, even though the economy is now back to pre-recession levels, the major stock-market averages are not even close: Both the Dow Jones Industrial Average have recovered just two-thirds of their bear-market losses, for example.
There is a silver lining, however, according to Fosback: As a result of investors’ extraordinary pessimism, the bull market will likely last longer than it otherwise would have if investors had more quickly jumped on the bullish bandwagon.
How bullish is Fosback? His econometric models are forecasting a 22% return for stocks over the coming 12 months — and, over the coming five years, an annualized return of 11%.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
http://www.marketwatch.com/story/rea...els-2010-12-24
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — News flash!
The Great Recession has now been completely overcome: The United States economy is today back to where it stood at its peak prior to the Great Recession of 2008-2009.
To be sure, you won’t see any press releases announcing this momentous occasion. That’s because the government doesn’t report the value of the gross domestic product (GDP) on a daily or even weekly basis. The GDP is instead reported quarterly, with a sizeable delay.
Still, according to Norman Fosback, editor of Fosback’s Fund Forecaster, who discussed the size of the GDP in the latest issue of his advisory service, we can extrapolate the government’s latest GDP numbers to estimate where we are today.
And, he said in an email earlier this week: “As of this moment, we are virtually right there: a 100% recovery” in real, or inflation-adjusted terms, of where the economy stood at its pre-recession peak. “And if not, then a couple or a few more weeks at most.”
You’d think that the complete recovery from the worst economic downturn since the Great Depression would be big news.
But you’d be wrong. As far as I can tell, it hasn’t been widely picked up by the mainstream press.
Why?
Therein lies a tale, which Fosback finds very significant when assessing the stock market’s potential. The lack of attention to the magnitude of the recovery has been caused, in his opinion, by “the extraordinary pessimism enveloping the consumer investing population, fanned by a fear-mongering financial media.” That skepticism, in turn, has played a big role in holding the stock market back from even bigger gains in recent months.
For example, as Fosback points out, even though the economy is now back to pre-recession levels, the major stock-market averages are not even close: Both the Dow Jones Industrial Average have recovered just two-thirds of their bear-market losses, for example.
There is a silver lining, however, according to Fosback: As a result of investors’ extraordinary pessimism, the bull market will likely last longer than it otherwise would have if investors had more quickly jumped on the bullish bandwagon.
How bullish is Fosback? His econometric models are forecasting a 22% return for stocks over the coming 12 months — and, over the coming five years, an annualized return of 11%.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.
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