Charles, I might be overstating a bit,but in 1980 I remember when the DOW was 700 and someone said it would be 4,000 by 1990. I think value is value,and growth is the key. I don't think that the stock market will matter much overall,if you buy a company with a p.e. of 15,growth of 30%,p/sales of 1,p/book of less than 2. I think value is the key,momentum investors in small caps will be crushed. If you buy tommorrow's hopes with little fundamental value in small caps you will be hurt. It is time for extensive balance sheet analysis,margin pressures will be great. The Index funds will be crushed,the large caps,and the high fliers. Alot of areas to avoid,and only one to invest in,smaller stocks will great fundamentals,and proprietary products. It is time to stay away from 100 p.e. stocks,those with little cash,and those companies with too much competition. Also the strength of the dollar and the UPS strike's impact are wildcards. The true thing to worry about as a bottom line issue is DEFLATION! All these pundits are saying inflation is low,that the PPI has been down fro 7 months,longest in history. If this economy slows down much more,deflation will kick in. We are on a cliff and no one cares,but it could go either way,inflation or deflation. My betting is on deflation ,mainly because the great bear markets start with deflation and no one is looking for it. All pundits are wrong all the time,they look for inflation,and I look for the opposite.
Hiram |
