limtex, you are going to get yourself into financial ruins if you continue and stick with the concept that a growing economy means a rising stock market. Go back to my April 2000 post (#reply-13483082) where I suggested a parallel between the current period and the 1966/82 period, and thus a lengthy period of a trading range, a broad trading range. The economy grew twice as fast from 1966 to 1982 as it did from 1982 to 1999. Yet, stocks went nowhere in the 66/82 period and grew by a factor of 10 in the 82/99 period. Have you asked yourself why for 16 years there was a disconnect between a growing economy and stock prices, and then another disconnect in the 82/99 period? It is "the valuation, stupid". We started the 82 period with stocks extremely undervalued, and then went to extreme over valuations in early 2000. We are still in the area of overvaluation here, and earning will have to grow by quite a lot to justify current valuations. You got to accept the fact that we are only in the third inning of this secular bear market, which will, eventually, bring stocks to extreme under valuations. That will happen after most people will be so disgusted thoroughly with the market that they are going to throw in the towel, the bottom of the secular bear will not be a "bang" with 5 or more GNT's, it will be a whisper with months on months of puny volume, a stretch of possibly a week at the end, when not a single issue register a new 52 weeks high (in August 1982, we had about 2 weeks where not a single issue registered a new high on the NYSE). Get this into your mind, the economy has less to do with stock prices than valuations, market psychology and liquidity. My advice, don't look for multi baggers, these will be rare and far in between in the next few years, anytime you can grab a 50% plus move in a stock, consider yourself fortunate and take it.
Zeev |
