From Ike's thread
Look at this piece from Cobot..
Stay away from those 10th story windows! We realize fully
the pain you and other Internet investors have felt over
the past six weeks. We've felt it ourselves. Speculative
stocks and quality stocks. Large stocks and small stocks.
Profitable stocks and unprofitable stocks. They've all
been taken out and shot.
During this period of pain, you would expect many investors
to start throwing in the towel. And indeed they have.
We've heard all types of bearish comments and forecasts
recently. One said we're on the verge of an Internet
depression. Another said the Great Bull Market that
started in 1982 is all done. And somebody else said the
damage inflicted on the Nasdaq will take years to repair.
Statistical sentiment figures also show extreme fear. The
put/call trading volume ratio has been moving higher in
recent days, showing option players are getting more
bearish. (They are usually wrong at major market turning
points.) And the put/call price premium ratio (which looks
at prices rather than volume) just hit its lowest point
since 1987!
Their emotional message is clear….run away from the stock
market!
As we've said many times, you shouldn't worry yourself over
what some pundit says is in the cards. Ask yourself, where
were these dire predictions at the end of August? Or at
the start of March, when stocks were supposed to go up
forever?
The point we're trying to make is that it's human nature to
feel pessimistic after the market falls and optimistic as
it rises. So take these predictions with a grain of salt.
Meanwhile, for those who really are wondering whether the
long-term trend is intact, we want to assure you it is.
How do we know? Well, one of the driving factors of the
market is liquidity…it's what pushes prices ever higher.
Right now, one measure of the money supply (the Money Zero
Maturity measure, or MZM) has grown 8% over the past year.
This is solid growth. To put it another way, the MZM has
expanded a cool $350 billion over the past fourteen months.
Translation? There is plenty of liquidity being created in
our economy.
Or how about this: There is currently just under $900
billion parked in retail money market funds. That's
clearly a ton of potential buying power.
Add to these liquidity totals the fact that inflation is
dormant, productivity is soaring and profits for the
leading Internet firms continue to grow relentlessly, and
you have the recipe for a long-term bull market.
Now realize that all of these fundamental factors should
convince you that the market's long-term uptrend is intact.
But we must watch the market itself to find out when the
turn will come. Right now, with the i-TIMER negative, you
should stay defensive, although you could do a little new
buying right here if you feel you're under-invested.
Either way, our goal today is to convince you the outlook
is as bright as ever. The market will undoubtedly get
going eventually, and probably sooner than many think.
And the rise will be led by exciting Internet growth
stocks…just when doubt and gloom prevent most investors
from buying them. |
