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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: TobagoJack who wrote (28913)2/19/2003 2:49:42 AM
From: EL KABONG!!!  Read Replies (1) of 74559
 
Hi Jay,

I believe the Dow can splat at around 3500-5000.

Back just prior to 9/11, I had the DJIA pegged at 7137, based primarily on real earnings (GAAP, not pro forma; stock options not accounted for in earnings). But the outlook has changed dramatically since then. Real earnings have continued to drop, and we now have some "ability" to estimate how stock options might impact a company's earnings (indirectly), and we can go to the S&P web site and at least get some reasonable figures to calculate potential future earnings.

I now guesstimate that the Dow will eventually settle in at around 5168, again based on fundamentals, and using a reasonable multiple of 15, not a bear market multiple in the single digits.

Prechter had always seemed to me to be extreme

I used Mr. Prechter's market "forecast" only because he has the most dour outlook among "gurus" of all of the ones that I am aware of. I certainly hope he's wrong by a large magnitude, but I wouldn't make fun of the man or his beliefs. While I don't have an abiding faith in Elliot Wave research, I don't dismiss the findings out of hand either. I find it's sort of like believing in life on another planet. I've never seen a Martian that I know of, but why take unnecessary chances? <g>

KJC
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