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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts
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To: AugustWest who wrote (60317)11/18/2000 5:00:25 PM
From: Doppler  Read Replies (2) of 63513
 
AW- Thanks for the update and for taking the time to type it in.

My take is that the Mellon folks are too optimistic with some of there assumptions.

With respect to oil/energy for example. They fail to mention what a cold winter would do to the situation given the record low reserves. It is starting to look like the possibility exists for a colder than normal winter (especially in the NE) which could cause catastrophic effects with NG, HO, and gas. That would impact the economy in a way that would make Fed policy seem inconsequential (should it happen).

As for earnings, they mention the deceleration of earnings but dismiss it as a problem. That is despite the fact that given the current PE ratio of the markets as a whole, investors have priced in increasing earnings for the foreseeable future.

Later in the earnings paragraph the gloss over the rapidly increasing default rate on corporate and personal loans. Such weakness HAS to negatively impact corporate profits IMO.

As for the election, statistics show that because of gridlock (which we certainly will have in great abudndance this year with the split nature of the house etc) that the first year of a presidential term averages only *3-5% return for stocks (* going from memory of the article I read) and that if you look at the 20th century alone the numbers are even more abysmal.

JMO, but their outlook seems to rosy to me.

butthinkcontrarianandinvestnow.com :-)
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