Birinyi rides the bull, sees S&P 500 soaring to 1,700

I posted the following last year on the great Birinyi:

"A few years back one of the daily contributors at the dorseywright.com site did an analysis of Mr. Birinyi and his calls on TA, tops and bottoms etc. It appeared well researched, and while I have no idea of its validity, they made him (Birinyi) out to be very wishy washy and vacillating.

Additionally, here is question and answer at the TC2000 site to Mr. Don Worden:

To Mr. Don Worden,

I have been a subscriber to your wonderful service for over 5 years and will be as long as I am capable of investing. Thank you and your sons.

I was an early subscriber to your newsletter on "Tick Volume" and was very impressed. If I am correct, I believe that your current "Money Stream" is an outgrowth of that concept. My question is how many ways can there be to measure the volume of money flowing into a stock. Laszlo Birinyi frequently mentions that he measures money going into and out of all stocks, "by computer." But I have never heard him explain the method. Investors Business Daily uses "Accumulation and Distribution" to measure the same thing. If these three methods are valid will they all give the same answer? Or, as I hope, is your method truly unique and superior to other methods. Thank you again. JJC

From Mr. Worden:

There is an article on this in the on line Users Guide, but it doesn't mention any names. I invented “Tick Volume” in the late 50s. In the 60s I popularized it widely. Tick Volume is a tally of all individual transactions that pass on the tape, giving naturally greater weight to large transactions. Originally it had a phenomenal ability to contradict immediate price trends, effectively forecasting future moves in the opposite direction. However, as the market gradually went from 90 percent public dominated to 90 percent institutionally dominated, the large transactions developed an overwhelming negative bias.

Eventually, after many years, I developed other tools, such as BOP, and I dropped “Tick Volume” entirely. It was carried on for a while by a brokerage firm named Muller and Company, who had been computing the data for me. They went out of business and, next thing, what do you know, a young guy named Laszlo Birinyi turns up with “his” invention, “Money Flow.” “Money Flow” is “Tick Volume” with the same flaws now as it had then. As a matter of fact, others also use it and publish it (including IBD). It was never protected under the patent laws and Mr. Birinyi is within his legal rights to publish “Tick Volume” and call it whatever appeals to his considerable promotional judgment. But I don't think I would ever sit down and break bread with Laszlo Birinyi. -DW"

 

Gary -

Steve Wood's had a float analysis method that was well supported by a company called stockshare.

He got about as close as you can get to analyzing EOD stock data as volume effects it..

Unfortunately, I was never able to explicitly backtest the strategy, but it is a high powered discretionary tool.

As for Birinyi- I guess thats the price you pay for writing Forbes articles every month - an endless coveraging of bullish "indicators" followed by comments about "sector rotation" and volatility when the Market takes a hit.

 

1280 by the end of the year, another 15%+ increase in the s$p.

Wow is this guy a perma bull.....

They talk like its a guarantee win no matter what, maybe will get 1200+ or 1300+ and drop right back below 800 in 2010.



How to Invest in Financials: Laszlo Birinyi
Published: Thursday, 22 Oct 2009 | 12:04 PM ET
Text Size
By: JeeYeon Park
CNBC News Associate

If the market continues at its current pace since the March lows, it could hit 1,280 on the S&P by the end of the year, said Laszlo Birinyi Jr., president at Birinyi Associates. He shared his market insights.

“I'm bullish on this rally," Birinyi told CNBC. "I think most people missed this rally—both professional and retail—that's why there's so much negative sentiment. It's not so much that they're negative—they realize the train has left and they're not on it."

"A month ago, I suggested markets are going higher—it’s been up 10 percent since then,” he said. "I don't think you can really forecast a market...so if we set some sort of parameter, it’s where it comes out."

Birinyi said although he liked the financials before, they had a good upward move and investors may be “a little reluctant to go into the banks.”

“[But] I like Goldman Sachs [GS 183.86 4.60 (+2.57%) ] a lot and Morgan Stanley [MS 35.55 1.47 (+4.31%) ] had good news yesterday,” he said. "If you want to have some financial exposure, I think brokers are better than the banks. I think if you’re looking for some income, there are some stocks that pay some very handsome yields with very limited downside.”

Birinyi said Goldman Sachs could eventually trade at $200.

In the meantime, Birinyi said the U.S. dollar’s decline is a “continuation of what we’ve seen for some years.”

“There’s no stronger force in the market than momentum and you can’t forecast when that will end. It ends when it ends,” he said. “What’s throwing the markets for a loop is the quickness and aggressiveness of the decline. It’s not steady and not orderly.”

 

Laszlo was making millions at Salomon Brothers 70' and 80's when you were still in diapers.

 

It's possible if the dollar keeps heading down but I'm thinking the Fed reserve is probably going to try to keep it above 70 but you never know.

Nothing is a straight line of course but if....

$90 on dollar index = 666 on the SP500

$80 = 920

$75 = 1,100

so using fuzzy math we could get to 1,700 in the next year or 2 if the dollar index gets down to around $58

Like even when we were at the highs in 2007 they were nowhere near the true levels of the 2000 highs.
A dollar index $120 vs. 80 so a true decease of 1/3 in value.

 

and 1280 really wouldn't be out of the question either by the end of the year if they let the dollar drop back to around 70 or 71

we've been gaining a little less than 200 points on the SP 500 for each $5 we lose on the dolar index since the March lows

 

wonder what lazlo says now

 

Did we get to 1700 yet, or did I miss it!!!


Foolish to think the SPX is headed to 1700, he was just out making another prediction a couple of weeks ago. Need to find it and post!

 

141 SPX points and over 1200 DOW points later!!!!!

Watching this from July 6th, 2011 didnt he just make you want to go out and buy the entire market!!!!

Well fast forward less than a month and the market is down huge!!!!

Enjoy!







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