Here is an interesting snippet from an article I came across on another thread. We will record it for future reference:
"Following Mr. P
It may be comforting to own stocks that are pre-soiled if the broad market continues to move in the direction expected by Mr. P, the hedge-fund manager whose views I relay occasionally. You may recall that Mr. P called 2001 quite well, shifting from bullish in January to bearish in February to bullish in April to bearish in June to bullish in late September and back to mildly bearish in December -- each time ahead of the curve.
He says he was "just lucky" with his cycle research, and maybe that's so. Nevertheless, we'll grant him another year to call the timing shots around here, like Babe Ruth pointing to center field. As I mentioned briefly at the end of my Jan. 16 column, he has turned bearish in the short term, forecasting a decline to around 1,580 for the Nasdaq Composite ($COMPX), 979 or 1,027 for the S&P 500 ($INX) and 9,280 or 8,821 for the Dow Jones Industrials ($INDU) by as early as the middle of February and as late as the start of April. He would plan to be a buyer on that decline, however, with expectations for at least a 30% bounce from the lows into July and possibly through the summer.
The 1,580 level in the Nasdaq and 9,280 for the Dowx are what he cryptically calls "cycle numbers," but they just so happen to coincide with lows the week of Oct. 8, 2001, when the U.S. air campaign against the Taliban began. The worst target for the S&P is just about the same as the low reached on Sept. 21.
I hate to sound so mysterious about this, as everyone knows you can't time the market with any accuracy, but the guy's record speaks for itself. He sees the potential for "event risk" or further economic deterioration as catalysts for the decline, but thinks asset-allocating pension fund managers will buy stocks into the decline for a snap-back rally by the time the quarter is done." |
