Elroy,
Always interesting to debate with you. It forces me to buttress my arguments.
Note, I didn't say that there WAS a bear market 2 years ago, Note, too, I was actually not saying that we are having a bear right now, only that the lows will be trending lower, and the highs will also be trending lower.
So, it is easy to "explain" the 40% rise in 03, because the peak in 03 was *indeed* lower than the peak at the bubble.
Why is this - My explanation is that we will see this type of down trend until average P/E rations have reached historical averages, which are about 15 to 17.
binarybits.org
P/E for the last few years
2002 46.2
2003 32.5
2004 23.2
2005 20.0
Data taken from
econ.yale.edu
When I say that we have historically high P/E's I am, of course, not comparing to the bubble, but to averages over the last 100 years (yes, I'm comparing to S&P averages, not to high tech averages).
If you think about it, all I'm saying is that there is still a lot of hang over from the bubble, and that it will affect the market for some time to come.
You are, of course, free to consider this the best of times and to fully invest your capital in the market - I am somewhat hesitant.
As usual, it will, of course, be possible to find time periods that are profitable, and companies that buck this trend. That doesn't disprove my statements.
You can always create any trend you want by carefully selecting the start and end times, and extrapolating over this interval. Notice, that your chosen start point, Jan 03 coincides with the bottom of the dot com collapse.
Peter |
