G,
Good find. I have been saying this for some time. Some people I talk to, talk of how they are staying away from technology and getting into names like PG etc. And these are people who weren't even scathed by the tech wreck! So I imagine there is a surfeit of scars and thus a tendency to stay away from tech on the part of many investors.....I just do not happen to be one(though I have my fair share of scars).
BK
Below is more reason to ask where is the Bullishness we constantly hear of from the Bears?
biz.yahoo.com
And one more Bullish article:
biz.yahoo.com
Money Managers: Few Market Rise Catalysts
Saturday October 4, 11:34 am ET
By Nick Olivari
NEW YORK (Reuters) - Stock investors want to see two things this fall -- strong earnings and a strong economy. Yet, some professional money managers are already looking past the third quarter and wondering what comes next.
In fact, with all the expected good news for the third and fourth quarters already being priced into current stock valuations, few see anything on the horizon to get too excited about in the near term.
"After the better-than-expected earnings come out, there is no catalyst to push things higher," said Matt Kelmon, fund manager at Palo Alto, California-based Kelmore Strategy Funds, which oversees $433 million.
Kelmon said that while earnings for the third quarter should be good because of the pick-up in the economy, they are also coming off low comparisons. Once investors fully analyze that earnings growth, he expects the tone of the market and sentiment to change rapidly.
That may make the decline in the major indexes in recent days just a harbinger of things to come. As Kelmon notes, it's been several months since the market last saw a significant pull-back.
"The market has had a good run, and while we are seeing some good earnings, some of that is already discounted," said Mark Foster, chief investment officer at Columbus, Indiana-based Kirr, Marbach & Co., which oversees $450 million. "So far, earnings have come on cost-cutting; the second leg (of a market advance) has to come with a little more bite to it than that."
SOLID GROWTH EXPECTED
Aggregate earnings for the Standard & Poor's 500 (CBOE:^SPX - News) companies are expected to grow by 15.8 percent in the quarter, up from a forecast of 12.7 percent growth on July 1 and almost double the actual 6.8 percent growth reported in the year-earlier quarter, according to Thomson First Call (News - Websites).
The ratio of positive earnings forecasts to negative warnings for all companies is also running at a favorable 1.7-to-one compared with the norm of 2.2-to-one.
Optimistic about the less negative environment, investors are already pricing in expectations for fourth-quarter earnings increases, currently running at 21.7 percent.
That would be heady stuff -- except that on an annual basis earnings growth is already predicted to decelerate through 2004, said Joe Cooper, research analyst at Thomson First Call.
From earnings growth of 16.9 percent in 2003, profit growth is expected to slow to just 12.9 percent in 2004.
Those numbers are not likely to be enough to send stocks rapidly higher.
"You want to see analysts undershoot the market by being too conservative," said Cooper, "You want companies to come out and say they finished strong and they expect the momentum to continue into 2004."
STILL UPSIDE?
To be sure, not everyone agrees that the market is heading for a rocky road.
Ed Keon, Chief Quantitative Strategist at Prudential Financial told clients in a recent note that earnings growth may slow but double-digit growth is not critical to support a strong preference for stocks versus bonds.
He also added that expected returns on equities should more than compensate for assuming greater risks even if the fourth quarter marked the peak for earnings growth in the near future.
Lincoln Anderson, chief investment officer at Linsco/Private Ledger, a Boston-based independent broker dealer, sees a slew of pleasant earnings surprises in the third quarter, and feels there should only be more good news to follow after three years of corporate cost-cutting and a recovering economy.
With "two quarters of growth, we could get some lift from inflation and that will help power earnings," said Anderson. "The market will find that analysts have underestimated" results. |
