This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

'Where Is the Market Headed from Here?'

NEW YORK ( TheStreet) -- The other day at the grocery store, I realized yet gain, that we live in very interesting times. The cashier, 50ish, and I struck up a conversation about investing when he found out what I did for a living.

He asked that same question that everyone asks: "Where is the market headed from here"?

I told him that I gave up trying to answer that question years ago, at which point he rattled off the investments that comprise his 401k, seemingly expecting an opinion as I paid for my groceries. I can't remember what they were, but it was certainly not a well-diversified portfolio, and I cringed when he told me this entire retirement portfolio was in six individual names. He seemed very excited about the market's prospects, and where we might be heading from here.

Now that was but one simple conversation, but it reminded me of what one well-respected colleague described as the "oscillation between greed and fear," which basically describes an expectation that markets will continue an uptrend. Investors get greedy, pay too much for securities, and are destroyed when there is a correction, or bear market. When "fear' takes over, they exit the markets, usually at the worst possible time, when stocks are punished well beyond what they deserve.

One of the worst parts of this is the psychological damage that can be done by buying and selling at the worst possible times; some investors feel burned enough not to return to the markets.

I still don't know where the market is heading from here; but I do know that I'm not finding a whole lot of names that interest me at this point, from a value perspective. But I am seeing some situations that appear downright frothy, squarely in "greed" country. (CRM - Get Report)is one example. Now, this company has been growing revenue at an incredible clip, up 84% between fiscal 2011 and 2013. Fourth quarter revenue was up 32%. It has also been profitable eight of the past ten years, so this is not a tech bubble era name that never made a dime. However, the company has lost money in each of the past two years, including a $270 million loss in 2013. Consensus estimates are calling for earnings per share of 63 cents in 2015, putting the forward price-to-earnings ratio at 75.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CRM $67.83 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs