Stocks Free for All Time: Get in Now!

In January, I wrote that I thought the Financial Crisis was over. I am looking to the future to find sound investments for my clients, and as I have said many times, and especially during the recent Greek Credit Correction, the Dow around 10,000 is just as big of a long term buying opportunity as was the Dow at 7,000 a once in a lifetime short term buying opportunity. For the reluctant, it is not too late to get into stocks.

Actually, it is early to get into stocks; the Dow first touched here ten years ago. I am sure the gains we will have over the next years will be as good as those had in stocks bought following the collapse of Lehman Brothers. It is simple financial fact- Blue Chip stocks are 12 PE's, beating estimates, and with a little selection, pay dividends equal to a 7-year Treasury note. Insanity is being out of this market, in effect owning Treasuries, when you can get the same yield in 12 PE names that with a modicum of growth, will repay your total investment with earnings over these same 7 years.

I don't know what there is to fear when you get paid the risk free rate, and with net earnings, own stocks free and clear and for the rest of your life in about 2017. For you technicians, one interesting fact: everything, the S&P 500, the Dow and the NASDAQ sank to 1997 levels during the Financial Crisis, and both the Dow and S&P 500 plunged below their 2002 lows.  But the NASDAQ never touched its 2002 lows and is now clearly leading the market higher.  In my opinion, like the 2002 NASDAQ low, Dow 10,000 is going to be a distant memory never to be revisited again.

Oh wait- the Double Dip Recession. Fine, if you need to fear what not is, then stay out and let me own the following stocks.  Citigroup: the most wounded of the big financials, and the dollar priced equity with the most leverage to rapidly improving credit quality. Intel: it pays 3% and has a 12 PE estimate.  UPS: another timeless 3% payer.  Starbucks: I am addicted to their coffee and a ROE that will be 27% by 2011. FMC Technologies: the main player in deep-sea oil equipment.  Vornado Realty: 3.5% dividend and more book value than Simon Property at about half the price.