herschel et al,
if you are a 'day trader' this has got to be the best of times. find some stocks with some nice defined channels and play the price swings within the channel.
if you are an investor, i would be extremely cautious and be willing to pull the plug on any investments at any instance. the short term risk far outweighs any potential gain. with the dow up over 300 points for the week to 8900, it would take only two more weeks at this pace to reach abbey's new target of 9300. and this before even the 1st quarter's earnings are out! very, very unreasonable. if the s&p 500 index keeps cranking, the avg pe will be over 30 in less than month, and that's while earnings estimates are being cut like crazy.
emotion, greed, mania . . . whatever you want to call it, it sure ain't investing on the fundamentals. there are several severe potential cracks (japan, the rest of asia, tight labor supplies, huge trade deficits and of course greespan to name a few). if any one or combination of these these gets to a 'critical stage', earnings and/or interest rates are going to get hurt, and this could cause a swift market correction.
while i am obviously concerned about all of these factors, i do expect mr. greenspan to pop off first (and soon). let's see what happens. |
