Gene, I'm glad you didn't think I meant to slam you. (: I try hard to keep an even keel, but I don't always succeed, and when I fail, I am often the last one to realize it. ):
As far as the retrace goes, three key points come to mind:
1. Jeff deserves a heck of a lot of credit for bringing this thing to our attention -- it has been pretty scarily accurate thus far;
2. Moving forward, I think it's very important to keep in mind a point that ajtj99 has made repeatedly, which is that bubbles retrace more-or-less along a bell-shaped curve. Thus, even if the current retrace deviates from the model, I will look for a continuation of something like a bell-shaped symmetry with the ramp up.
3. One point that seems to be agreed upon by many of those who have followed the markets the longest is that bubbles and the deflation of bubbles seem to produce something like mirror images of each other so far as valuations are concerned. That is to say, just as the valuations during a bubble become ridiculously high, the valuations during the deflation may become ridiculously low.
But, IMHO, the bottoming of the markets, in terms of index dollar values, probably does not coincide with the bottoming of aggregate PEs. I expect that the index values will bottom long before the PEs do, but I don't see the index values bottoming this year. Why not? To be honest, I can't really say. It's more gut feeling than anything else. }:
augie |
