The Dow is way overvalued over 7,500. The Naz is overvalued at 1,200. It aint over! I suppose we could get a nice run-up after that horrible 300 point drop yesterday, but I don't see the bear market being over yet.
The economy has just begun to sink. I think we will get a very long recession, followed by a slow recovery. High personal, corporate, and government debt along with a low savings rate is disastrous for the economy, and when combined with a wave of retirees from 2003 to 2008 (est) it will be a devastating one-two punch. Then there is the stock market and real-estate bubble. I think the market will bottom out in 2005 with the Dow at 4,000 and the Naz at 800. Before my low target was 1200, but that was when Cisco was around $80. I had no idea the tech recession would be even deeper than average.
Current positions: Short KO & G. They were selling Jan2004 $35 strike puts for $3 when G made a cliff a few months back @ $37-$38. Needless to say I loaded up for a fairly safe double and am still holding all of them because I want to see G at $23.40 to sell. As for KO, it still is the worst valued stock in the Dow and so I still have it short. However, I did dump half of my KO puts when KO was at $47 last month.
I ought to shoot myself for not raising my bid on the UVN put a while back. I would have quadrupled on that if I just raised my bid 20 cents!!!! And at the same time I was aiming for INTC and ADBE puts! Oh well, I am still doing exceptionally good, though only because my risk level is to the stratosphere. |
