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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: yard_man who wrote (47292)12/14/2000 2:18:50 AM
From: UnBelievable  Read Replies (4) of 436258
 
While That May Be Where The Steep Decline Stabilizes

I think that any bottom that has the potential to be missed when it is first made is not a stable bottom.

There still is a strong belief and expectation that once the bottom is in the market will rebound strongly to a much higher level.

I just don't see this being the case. To be sustainable future growth in the market has to be based upon the growth of profits of the companies whose stock is being traded.

Initially these companies will be operating in the context of a depressed economy and the growth of their profits will actually be slower than average. Even as the economy rebuilds, if it were to be able to achieve sustainable growth of 5 - 6 % per year it is not reasonable to expect stock prices to grow significantly faster than that.

That would have stock prices growing at 1/2% per month.

If people understood that if the were correct in picking the bottom the only benefit would be 1/2% per month, but if in fact the bottom is not in that they could risk significantly more than that I doubt that there would be the fervor to get in as soon as possible.

As long as the belief exists that once this correction is over we are going to go back to price growth as we had come to experience it we will continue to see the type of volatility which we have been experiencing. People rush in, bid prices up based upon nothing but expectations, and then find that there is no support and the prices fall back as quickly as they rose.

No one missed the bottom in Japan.
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