Fred, my thoughts: COMMENTARY -- MARKET BOTTOM OR DISASTER STILL AHEAD?
Isn't it fascinating? Such strong, yet diverse opinions. Everybody claims to know what they're talking about. Well, guess what? Nobody does.
When several, including Raptor, are calling the bear market all but over today, Desmond is saying the opposite. He sounds a lot like Bill Gross sounded a couple weeks ago with his Dow 5,000 prediction.
I think both sides are wrong. I think the death has been slow and steady and could continue for awhile, albeit with a few sizeable bounces here and there. I don't expect a panic sell-off or a major bottom that we can all pinpoint. We've all grown too accustomed to so many disappointments that I don't think much can happen that would scare everybody into a major panic selling mode.
Yes, PE's are high still, but they can come back down fairly quickly and probably will at some point. Earnings will likely grow fairly suddenly again as IT spending perks up at roughly the same time. This is not only due to competitive pressures, but also all the additional data we have today regarding consumer confidence, IT spending, trends, etc. It's almost like a "green light" will be turned on.
History is a guide, but hardly an exact one.
Certainly predictions are all but worthless. Basically it's just a lot of people guessing, hoping to get crowned the next GURU for sticking their neck out and getting lucky about being right. Could former famous guru Abby Joseph Cohen have been more wrong the last few years? She's looked like a fool, quite frankly. As have many others who have paraded their opinions around CNBC and various periodicals.
By the way, what was so special about today anyway? Raptor says it was a technical one. OK, I can buy that, but we can't ignore that the fundamentals of the economy. I don't see any major signs that things are definitely getting better. Do you?
We could see the Naz hit 800-900 yet and the Dow 5,500, or a range of Naz 980-1400 for the next 3 years. It's also possible that we could see IT spending pick up suddenly in the next year or so and see the Nasdaq reach 1600 or even 2,000 by 2004 if earnings suddenly pick up and everybody gets over-exhuberant again.
To make matter more uncertain, we still have tons of manipulation. In fact, we even hear many spouting about the "PPT's propping up the Markets and the terrorist "Short-sellers" trying to tank it and profit.
The bottom line ---- NOBODY HAS A CLUE! |
