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A year ago today, the legendary Warren Buffett made headlines by saying the U.S. economy had "fallen off a cliff" and was engaged in the economic equivalent of war.
I reported his remarks on "World News" that night and noted that while the Obama Administration "was minting recovery programs at a record pace," the economy seemed to be worsening by the week, from rising unemployment to record foreclosures to a plunging stock market.
That night the Dow closed at 6,547.05, its lowest close in 12 years. The value of all U.S. stocks had dropped from a peak of $22 trillion to $9 trillion, a staggering loss of wealth.
We now know that March 9, 2009 was the Dow's rock bottom close of the Great Recession. One year later, the DJIA is up more 60 percent from its fear-of-another-Great Depression-low.
The value of all U.S. stocks now stands at $16 trillion. But ordinary Americans continue to wonder if they will ever fully recover the wealth they lost. So it's a good time to ask: where is the stock market headed from here?
Art Hogan, chief investment strategist at Jefferies & Co., believes it's headed 2,000 points higher this year, to 12,500. He's heard the arguments some make that stocks have "come too far too fast" to have another run in them this year, but he doesn't buy it.
That was based on a "worst-case scenario that didn't come to fruition," he says. "We had priced in widespread bankruptcies. Now we have to price in ongoing businesses," and investors are not giving corporate America enough credit for the earnings he thinks they can generate.
"Do we have a massive slowdown in the economy when the cover of the stimulus is no longer with us?" says Hogan. "It's a natural fear. But I don't think it happens."
Veteran NYSE trader Alan Valdes sees another year of market gains and thinks the Dow will close the year around 11,500, a thousand points higher than it is now. He says high unemployment and a fragile housing market remain threats to the recovery.
But Valdes is optimistic about the stock market because, for the time being, he sees no better alternative for investors in search of returns.
"As long as interest rates are at zero, this is the only game in town," says Valdes. "Instead of making zero at the bank or maybe less than zero after you pay the fees, you can put your money in a multinational that will also pay a dividend. It's a risk, but it's a good risk."
Charles Biderman, CEO of TrimTabs Investment Research, is less sanguine about the outlook for stocks. Biderman puts the odds of a double-dip recession at "50-50" and says "we're better than we were a year ago but not out of the woods."
"What will happen to the PIIGS?," he says, referring to the crushing national debts of Portugal, Italy, Ireland, Greece and Spain and their potential to wreak havoc with the European economy. "What happens when the Fed stops supporting mortgage rates at the end of the month? What happens when interest rates start to go up?"
"If there's no more bad news for the next six months, maybe stocks are a good buy," he jokes.
So where does that leave you? Well, a lot better off than you were a year ago today but still a lot worse off than you probably were in October 2007.
The confidence of American investors has taken a beating along with their portfolios. "Typically at this time of year," says Valdes, "people start to get refunds and they want to put them to work and that gives the market a boost."
But this year "we are concerned that the public is not coming back in. Maybe they're saying, 'I don't care if I don't make money. I just want it safe.'" For that reason, he says, it's a "professional traders' market" right now.
If it's any consolation, a year ago today, at the market's lowest moment, Warren Buffett had not lost hope: "Everything will be all right," Buffett predicted then. "We do have the greatest economic machine that man has ever made."