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Old 07-04-2002, 07:20 PM
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Default DOW may stay below 9000 next week...



That's my predictions. You may see a short term rally, if there are no terrorist events, but I still see problems in the telecom and technology sectors. I believe we have not heard the end of accounting scandals, and the public is generally dissatified with the recent events in the market. So, it's really just a traders market, and some financial analysts, like Jeremy Grantham of Grantham, Mayo, & Van Otterloo say the S&P is worth 750. You can read an article at multixinvestor.com by Tom Philpott called "Bears prowl at the Morningstar Conference."


If you do decide to "invest" in equities I recommend looking at stocks that are undervalued and do not have exposure to telecom and technology. If anyone has done some research on undervalued stocks, please post them so I can check them out.


Good Luck


Mark


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Old 07-12-2002, 02:57 PM
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Default Re: DOW below 9000 ,,gr8 call.



mark, you are a genius...you even spotted the field 300+ points due to the bear trap run-up on fri after july 4th...low volume short day...i sold my dow puts (maybe too early) with a nice profit late fri 7/12/02....gl
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Old 07-12-2002, 05:19 PM
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Default Re: DOW below 9000 ,,gr8 call.



scalf,


I've been studying the market real close lately. If you see any rallys up through October this year it will be a "bear market rally." The market is overvalued. Even though the economy is showing recovery, the profits are not that great and don't justify the prices. If you are looking to buy stocks, look for undervalued, but they may even drop lower due to the panic in the marketplace. I think we may even see some more bear market rallys, but don't be fooled, especially if it goes up 300+ points in one day, because like I said the profits don't justify the prices.


My money has been out of the market ever since the dow hit 9600. The problems have not been resolved. Today consumer confidence dropped like I expected. The marketplace does not trust our government. The investors don't trust the accountants. I think the report I referenced in an earlier post will probably come true.


Good Luck


Mark


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Old 07-12-2002, 09:03 PM
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Default Re: DOW below 9000 ,,gr8 call.



If you throw out the tech stocks that people still love, I think the market is fairly valued. I have been in it through this recent drop and haven't lost all that much money. Just being rational here, I mean I love the business models of YHOO and AMZN, but unfortunately I have to agree the valuations are ridiculous and I need better entry points for them than right now. I would be concerned though, I don't think there will be many that time the recovery in the market. Its so fragile in terms of mentality, but I can't help but sense that there will be a sudden pickup when the noise stops and people get over their preocupations that every CEO is cooking the books. While it would be nice to miss out on some downside if the market keeps tumbling, I think if people use a 2 year time frame, they will be ahead with stocks. Might be due to a rally coming very soon or a rally next year, but in the end I just don't see how anyone will make more money out of the market right now with interest rates at all-time lows and a modestly growing economy. I think its a fallacy to think that in the long run stocks will return to some "long-term trend" of earnings valuation. More people than ever own stocks and even with the dollar's fall we have a lot more money in our markets from abroad. Unless people suddenly decide they don't want any money in the market for their retirement savings and the foreigners take all their money elsewhere, you will have to see higher valuations...simple supply and demand. I rarely get into the short-term horizons most people do, but anything more than 2 years I think you will cost yourself being out of the market. Just my two cents....
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Old 07-13-2002, 04:04 AM
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Default Re: DOW below 9000 ,,gr8 call.



wildbill,


I think you could agree with me that the S&P is the index that represents what the market is valued at. Assuming this to be true, the market is overvalued and it has nothing to due with politics, terrorism, but has a lot to due with stupidity.


In one of my previous posts I mentioned an article buy Tom Philpott called "Bears Prowl At The Morningstar Conference." Jeremy Grantham, a founding director of Grantham, Mayo, & Van Otterloo states "the S&P is worth 750" versus its current level of 950 to 980. This article came out on 7/3. Furthermore, he states that the long term real yield of equities stands at around 5.7 percent. So, he has calculated that the P/E should be around 17. When this article was published the P/E was at 25, now it's a bit less.


Without all the nonsense going on about accounting, corruption, politics, and war, the market is still overvalued. Whoever has their money in stocks that are not worth their book value or less will get hurt big time. There are just too many variables that could send the stock market down the tubes, and this is why I am out of the market right now. I think in the near future we are going to see some big drops in the markets, even to stocks that are undervalued just due to panic setting in. I am waiting on the sidelines for things to cool off.


Good Luck


Mark



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  #6  
Old 07-13-2002, 05:19 AM
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Default Re: DOW below 9000 ,,gr8 call.



"When this article was published the P/E was at 25, now it's a bit less."


this must be a forward looking number (a more useful one than trailing) as the trailing P/E is about 40.


http://www.spglobal.com/indexmain500_data.html


as far as estimated earnings s&p publishes 2 sets that i know of one is as reported and one is operating:


http://www.spglobal.com/indexmain500_data.html


also notice that they give top-down and bottom-up estimates.


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Old 07-13-2002, 05:22 AM
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Default Re: DOW below 9000 ,,gr8 call.



sorry estimates link is


http://www.spglobal.com/earnings.html
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  #8  
Old 07-13-2002, 01:00 PM
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Default Re: DOW may stay below 9000 next week...



Apart from accounting/book fixing problems,if I were not a trader, I would stay out of the market for at least a year. Clearly, the market hates any kind of uncertainty and until the terrorist threat is resolved if it will ever be, I see a downward trend sometimes sideways at best. People's confidence in the economy in general and the government's ability to protect their personal security may have been shattered by recent events. Add accounting scandals to this mix, I see a long-term downward trend. I would play it safe for now.
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Old 07-13-2002, 05:44 PM
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Default Re: Thanks for the link. *NM*



nm
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  #10  
Old 07-13-2002, 05:47 PM
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Default Re: DOW may stay below 9000 next week...



GOODBEATGUY,


Even if we didn't have all the problems that you have mentioned, the market is still overvalued.


Good Luck


Mark



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