Taking Apart David Tice on His Dow 3000 Call
Editor's Note: Arne Alsin's column runs exclusively on RealMoney.com; this is a special free look at his column, which was originally published Nov. 25. For a free trial subscription to RealMoney.com, where you can see Arne's commentary regularly, please click here.
Doomsday scenarios attract attention. Bill Gross made a Dow 5000 call in September that generated a lot of attention, though the underlying message was flawed. He said, "The market needs to yield close to 3.5% before it approaches fair value, and that means Dow 5000."
As I explained in my column on the subject, "dividend yields don't determine value," and any prudent buyer of a business knows that business value is determined by "earnings, cash flow and net assets... not dividends."Bill Gross' message was worthy of attention because he may be the best bond manager around. Similarly, one of the best short-sellers around, David Tice, manager of the (PBRCX)Prudent Bear fund, has been preaching a doomsday sermon of his own. Among other things, Tice says that the Dow will reach 3000 before the bear-market decline is through.
The David Tice Rationale
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV