Finally CNBC woke up this past Thursday when Maria asked "Why would a brokerage house downgrade from a buy to a sell, Gateway at 18, when it already has dropped from 80?" (because they waited to get their clients out) Late Thursday night on CNBC, Hugh Johnson from 1st Albany hit it right on. He stated that Gateway, Cisco, Intel etc are at good values now. However, on the way down the market doesn't stop at good value, it continues down until stocks become way under valued. He doesn't look for a turn around until sometime next year when Techs will lead the market up. On Friday, John Rogue stated this can't be the bottom - there hasn't been enough pain. People are disillusioned at bottoms and just want to dump stock.
I've been preaching this is a bear market and people are finally realizing it. The top has taken a long time to form. We will have rallies but I can't help but believe that there is more tax loss selling to come. Then starting at the end of February, we will have lousier pre-announcements putting more pressure to the downside. Granted some investors have been nimble and made money this past year, but most have not. Worrisome more is if the public starts to pull out of mutual funds in great numbers, who will buy the funds stocks?
Ron |
