Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: SOROS who wrote (15711)	12/23/2001 7:57:06 PM
From: Jimbobwae	Read Replies (2) of 99280

High Earning Ratios are more of a problem at the top of the cycle when too much fat has built up in the Co's. Corporations are trimming to the bone and will be set up to increase earnings at the slightest improvement in the economy. Seems like anyone waiting for PE's to get to 14 are going to be in cash for a long time. Anyone predicting new lows is predicting a depression. I'm not saying it couldn't happen but I don't see anyone developing a rational thesis on how it would happen only a fixation with needing the indexes to conform to what is thought to be required to establish a bottom. Unemployment is the most critical factor. Argentina is not a factor(already expressed this opinion here but additional reasoning includes: GDP = the GDP of New Jersey, or 3x the GDP of Orange Cty Cali. remember when they defaulted? Argentina is not a recipient of massive manufacturing investment as was Malaysia during the Asian contagion and is not as integral to the economic tide of development. It is culturally, geographically, and politically distinct from its big neighbors. Brazil is the key to SA and they are regarded for their energy development savvy and have a growing high-tech center in Curitiba with strong ties to manufacturing in the US. Why else would the US say "good luck" and not mobilize to throw $ their way. Its amazing to see the resilience our economic system has to the unimaginable terrorist attack. The mideast is being shrugged off almost as if the world is saying "we are sick and tired of your BS - you need to figured it out yourselves and stop pestering everyone with your perpetual whining" Airlines are having major problems but how much more growth are they going to achieve when they are a lagging beneficiary of the growth bubble and the wealth effect? The majors were already in trouble - Only the small regionals adopting Southwest models can grow consistently. The market already realized this with the valuation of LUV > AMR+DAL+CAL+UAL+U + 4billion Companies are not "hiding" poor results except for fraud driven, ENE issues. Everyone is now accustomed to real time info and now that companies are not providing guidance they are being punished. They only had credibility when the bubble was inflating. Its absurd to believe any company can predict the future, two years out. JNPR as an example, builds products for customers that have been announcing huge cutbacks in CapEx (latest example was Q this past week) and have seen non-competitive customers go away through economic darwinism. JNPR is on the tail of the dog. Of course business plans and bank loans are predicated on rationale in executing a plan but hey things happen and you adjust. The V recovery is a joke it suits the Shills on TV that must instill hope-coated greed to have a future. Perhaps the best approach is take reasonable Bullish predictions and reasonable Bearish predictions and figure out where the middle is and use that as a guide.

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