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Strategies & Market Trends : Waiting for the big Kahuna

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To: Skeet Shipman who wrote (52948)	7/15/2001 9:03:42 AM
From: William H Huebl	Read Replies (4) of 94695

Skeet, Thanks for posting that... very interesting. One of the things I like to do is to try to pick apart items like that for several reasons: - it is all too easy to become a lemming once again (I was for years and years and years) and the first step in becoming one is believing all you hear and read; - these are the same guys who didn't tell us to get out at the market peak (I did, as you know... even a bit BEFORE the peak); - you really do have to take responsibility for your own investing. So here are some of my thoughts: <Behind this restlessness is historical evidence that monetary ease leads in time to economic improvement, and that in between, stocks start to rise.> COMMENT: That may be true but it is not looking good right now: businesscycle.com And this puppy makes no sense at all: <Stocks' p-e ratios are above average. But that's typically the case at earnings troughs and when the underlying pace of productivity growth is elevated.> Comment: What is typical is p-e ratios come back to norm or below before the markets begin to recover in any significant way... whatever the timeframe. And that is not comforting to anyone thinking about re-investing their monies after being burned once. And here is a rich one: <High potential liquidity is another reason valuations should remain above the historical norm. The large numbers of baby boomers, now in their peak earning years, are building up sizable balances in their 401(k)plans. Though currently allocating those funds somewhat more cautiously, they continue to see stocks as the way to achieve a secure retirement.> COMMENT: Of course there is no measurement of "High potential liquidity." It is hard enough to try to measure actual liquidity, which by the way as I understand it is not great. So it's David's word against mine. I say the buggers who have the highest "potential liquidity" are the ones who were burned and burned good... they are keeping their monies under the equivalent of electronic mattresses and I do not believe they will bring that money out any time soon. The historical precedent is the 1929 crash when it took over 20 (count them, 20) years for people to get back to where they were in the markets at the peak!!! So to summarize my approach: you must take care of your own destiny and you can't let anyone tell you how to get there or when, no matter HOW auspicious the credentials. Here are some of the things David has said: businessweek.com firstfinancialgroupinc.com And here is his home base? thefinancials.com Now with all this forecasting capability here is my really dumb question: David, in Dec 1998 you proclaimed all the best... yet there is NOTHING out there since then until now??? Where are your proclamations that the market was dangerously overvalued? Where are the cautionary statements to the public? Or do you only reserve that stuff for the BIG guys who pay you...

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