Heinz, yes there may be a doomsday, after which the market may disappear in a black hole but I do not believe this will happen. I believe the underlying economic expansion in the US is fairly sound. The internet is real, broadband is real, biotech is real and B2B is real, the US is the productivity leader in the world.The stockmarket does not look healthy overall,the volatility is high and while a lot of stocks are sky high and will probably never earn any real return to investors, there many, very cheap stocks, even by historical standards. I believe, that the General Motors, Wal Marts, Emerson Electrics and Dow Chemicals will profit far more from the internet, than the average investor realizes.
While these stocks could go down in a real doomsday bear market, there is an even better chance, that some of them have an incredible hidden value, which may be realized in the stock market.
GM is a good example, with GMH,GMAC finance, B2B activities.
Then we have Delphi, with car electronics, chip factories, supply chain managment capabilities, Car Internet etc. free strong cash flow etc. etc.
We have got the drug companies in the dumbster at 20 x earnings just a few days ago. Who will sell all the new biotech drugs in the future?
Just 2 weeks ago, the baby bells were in the dumbster, despite significant growth acceleration & wireless assets.
We have got dirt cheap insurance & bank, S&L stocks.
These business will not go away and they are cheaper than they have been by historical measures for most of the time.
Sure all these stocks may go down even further, but even if they adjust only slightly toward the momentum type stock watch out! I try to watch the market to guess which sectors get trashed but may find new interest due to macroeconomic trends.Thats why I believe,the baby bells and the drug companies are interesting but bank stocks are not.
Well, I would be interested in knowing what kind of value stocks you are looking at.
Yes, cheap is relative... |
