WOW!! What an amazing couple of years it has been. One of the worst recession for over 100 years came and went. Dow Jones went from 13365 on 26 Dec 2007 to 8515 on 26 Dec 2008. It's been an excellent learning opportunity as well as an opportunity overall to make a profit in nearly all sectors of the market. The opportunity have not disappeared completely, there are still plenty of stocks which are 50% off their 2007-2008 highs and have the potential to reach those highs again in 2010. Take Mittal Steel (MT) for instance, a stock I bought for my father. I bought 400 shares at $41.12, the 2008 highs for this company was $100. The company survived through the early stages of the recession in early 2008 by having strong earnings. While most stocks were tanking, this stock increased in value while increasing dividends and improving earning estimates for the first two quarters of 2008. On 7 June 2008 the effects of the recession starting catching up with the company when it missed its Q2 estimates and the stack stock started to take a plunge. Within 6 months the stock lost 83% of its value. This devastating decrease in stock value, put the managements crisis managements skills to the test, and they did not disappoint. They were able to make consistently excellent decisions relating to lay-offs, plant shut downs etc to keep the costs low and stay liquid without floating additional shares. This created an opportunity for new investors to buy shares at a discount. Today the share closed at $45.55, my estimate for Mittal steel is $80 for 2010. This is because I expect them to beat at least 2 estimates in 2010. Having this said, it will not be surprising to see a pull back sometime in 2010, however this will not shake off the $80 estimate for Mittal Steel.
For Dow Jones, in 2010 I estimate it will reach 14000 and continue the steep climb for up to 2 more years.
