Lee: (or anyone)- I've been operating under the assumption that we have needed to get back into the 1990-1998 Naz composite log chart (channel) - (we blew out upper trend line when Greenspan overeased in 1998....went into absolute bubble territory, way above the channel, with Y2K liquidity additions in fall '99)...
Now, we are back to the approximate mid-range of that log channel, lower range being 1960 (on my chart), upper range around 3150....the channel "rises" about 21% a year...about in line with profits....so it makes sense to me (valuation following real earnings)...
Now, in looking at individual bull leaders from 1990-2000.....the Csco's, EMC's, Dell's, etc....most of charts look irrevocably broken....as if they are going to have to map out some new bottom, channel, etc...before we know where they are really going (note: all these companies are great, just talking stock price here)...
So, I am starting to wonder if the Naz log chart 1990-2000 still has validity....for, if the leaders of the Naz have broken their trendlines...what's to say the Naz log won't either (and start a new channel?)...
I do see some logic in keeping the old log (channel) chart....ie, the reasons for that channel (as I identify them) are still in place.....and it makes sense to me that real earnings on the Naz will continue to grow around 21% p.a. over the next few years...again, some years higher, some lower...but 21% seems about right...
So, I am torn here...any advice? (Just rereading Murphy's book, and getting comfortable with longer term trends vs. short moves...) |
