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Strategies & Market Trends : Strictly: Drilling II
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To: Frank Pembleton who wrote (15089)7/2/2002 9:42:31 PM
From: Art Bechhoefer  Read Replies (3) of 36161
 
Frank, the obvious weakness in this thinking, which is sound at the macro level, is that perceptive investors don't invest in the market. Instead they invest in outstanding companies. It took a long time for the DJIA to recover after the crash of 1929. Some analysts say it didn't recover for more than 20 years. But some companies, like 3M, did very well during the period when the AVERAGE stock did poorly.

There are a few really outstanding companies around, with price-earnings ratios in the 10 - 20 range, price to sales less than 1, and book value at or near market value, with a growing market for their products or services. I'd rather stick to a few good ones than worry about the average.

Art
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