He may be right, who knows?
My prediction for the bottom is that it will be when everyone realizes that the market isn't just cisco, and jdsu, and glw, etc. and just forgets about them and their problems, and looks at the rest of the "world" and starts to buy things other than tech.
There's a lot of companies that are making money and will continue to do so.
As for tech---The big losses for the last year or two may be a little distorted IMO, due to the large write offs of goodwill. Next year things should be a little more clearer because supposedly??? those big write offs are finished, and so profits should reflect a truer? picture of what's going on with them.
The Govt (fed, state & local) employs approx 35% of the workforce. (I think that's the stat) Those people aren't going to be fired or laid off, so there's a base that supports everything.
The pension funds get money from them every week, so there's a base for money inflow.
The interest rates being so low start to make it "unprofitable" to invest in interest bearing securities
compared to the historical rate of return of the stock market.
The short interest is the highest it's ever been (on all three exchanges) and that will eventually come into play when they start to cover.
Lower interest rates translates into lower costs for companies and higher profits.
Lower interest rates make it easier for homes to be financed.
There's a lot of things that are lining up on the recovery side of the argument, most of which I haven't even touched on or probably even thought of.
So, sooner or later (hopefully sooner) money will flow into the market.
The bear market could last for years sure, but I am of the belief that it will not.
I also think trying to figure out exactly when a bottom (or a top) is in, is futile.
The market will turn, and when it does, everyone that was predicting the end of the world will scuff the ground and sheepishly ignore their public doom and gloom pronouncements.
IMO there's no point trying to worry about it, it will happen when it's ready to happen, and not before.
In the meantime, the market has some terrific buys right now, and that's my story and I am sticking to it! |
