Local stocks are on a tear - but is it too late to get in on the fun?

Stocks actually fell today, with the Dow down 44 points. But that still puts the blue chip index within 200 or so points of it's all-time high in October 2007. To appreciate what's happening you really need to go back to March 9, 2009 when the Dow Jones Industrial average fell to 6547, the cumulative result of all the nasty stuff that hit the financial markets. Understandably - but misguidedly - a lot of people bailed, even if it meant taking a loss. Well, in less than three years the market is nearly back to that 14,000 mark (it's up about 93 percent). The stock prices of many L.A.-based companies are up even higher: As of Tuesday's trading, ahares of Disney had soared 215 percent from March 2009, Mattel 222 percent, and DirecTV 153 percent. There are some less successful stories - DreamWorks Animation in Glendale is actually down compared with 2009, as is Dole Food, another locally based company. Wall Street is never easy to decipher and this rally has been a particular puzzler because the economy hasn't exactly gone gangbusters these past four years (not to mention all the concern about the fiscal crisis in Washington and the European debt crisis). That might explain why individual investors have been so reluctant to go back. But what about now? From this week's Business Update on KPCC:

MARK LACTER: Here's where it gets tricky for those who might want to go back into the market - through stocks or stock mutual funds - and run the risk of being too late to the party. So are stocks about to peak out, at least for the time being, or is this just the start of an extended bull market? Good luck figuring that one out (you'll find experts on both sides), and that's why it's worth going kind of old school on investment decisions. In other words, don't focus so much on the overall market or on the timing, but on the fundamentals of the company you're investing in. You know, for all the uncertainty about Wall Street, companies that tend to do the best in the markets are the companies that perform the best. Disney, Mattel, L.A.-based Occidental Petroleum - all in quite different industries and all reporting pretty solid earnings growth.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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