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Old 04-23-2002, 09:05 PM
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Default Re: Poll on Market Movements



15 in a historically low inflation and real interest rate period Dr. Bill? That ignores an awful lot of fundamental issues and the fact that stock issuing companies dominate the economy more than they ever have. Another issue is simply that there is more investment targeted money than there ever has been sloshing around. There aren't many places for it to go. Long term bond yields under 6% won't get any attention, munis and money market funds are practically giving you nothing in return. People have clearly set aside a lot of money to be used for investing, this money has to go somewhere and with interest rates as they are the money will increasingly go into stocks.


S&P isn't overvalued by anywhere near that much, but of course that is just my opinion. Selling into rallies right now is an excellent strategy because it feeds on the fears of investors. It will work awhile longer, but I think by year end the strategy could take a hit as investors turn their sentiments upward. Call it a bubble if you want, but I think earnings growth due to a lot of needed layoffs/capacity reductions and continuing productivity growth will make what looks like high EPS numbers turn much more moderate by year end, especially when you put them into the context of potential returns in other commonly used investment vehicles.
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