From your link written in march 1997
Based upon probabilities determined by the results of the period 1941-1975, and the recent all-time record low Dividend Yield of 1.95, the S&P 500 Index will probably decline a minimum of 10% during the next 12 months. Per the same statistical results there is 0% (zero percent) chance of rising prices. It looks grim for the stock market.
it better hurry, half a yer is gone and how far up is it?? So much for history and historical probabilities.
Your stuck in the past author even uses stuck in the pst metafors ie:
Since the beginning of this century there have been basically three types of environmental measurements (valuations) for trying to determine or forecast future weather. These are barometric pressure, humidity level and the temperature. While it is indeed true the meteorological science of weather prediction has seemingly become very sophisticated in recent years by employing satellite pictures of the cloud structure enveloping our earth, the factors which most influence our clime in the not too distant future STILL REMAIN THE OLD TENETS OF MEASUREMENT: Barometric pressure; Humidity Level and the Temperature.
Seems he hasn't heard about Global warming, El Nino, tropical volcanoes, all good long term predictors of the weather, but only recently recognized.
First of all (conserning my son) it wasn't money he could not afford to lose, it was money he just didn't have his hands on yet, but was due in two weeks, (A very proper and not frivolous-speculative use of a credit card, or do you prefer he spend it all going to dinner and showes) As I said he's already paid it back and he hasn't sold any of the stock. One mans risk is anothers gain.
Ever hear of a stock symbol FMAC. It had a book value of 160 Million year end last year it is worth nothing now, couldn't even sell itself to cover debts.
How about Microsoft, a P/B of over 20, Or how about Oracle, a P/B of over 16. How the heck do we use P/B as an evaluation of a service company? Or a programing company. Fox software a few years ago with a programing staff of 12 programmers wrote a program valued in the billions, Probably in leased offices. The reason price to book is so high is not that companies are over valued, it is because they have shifted from manufacturing to services.
Lets add a couple of companies you probably use daily, how about Yahoo P/B iver 18. Lycos over 12. I could go on and on and on. P/B may have been important for the market when it was dominated by manufacturing, it is not when the market is dominated by servuces.
As for your argument that the micro environments get swept away by the mnacro environment, in nature many trees survive a forest fire, many trees survive a hurricane. In the financial markets many companies prosper during hard times be it the local shyster who represents bankrupcies, to the bill collection agency. There are many countercyclical industries that will survive unscathed the next market tumble be it next week or next year or in 10 years. Gaming especially small locally based gaming will be one of them.
While i don't much put a lot of store in the bible it does have it's useful parables, not the leastis the storyof of the 10 talents. We can run and hide and never take a risk, or we can take risks and prosper, or maybe lose and have to start over again, but I don't like putting my money under my matress, and i don't like hiding under my bed. So thank you kindly for the warning, but I'll assume my own risks and when i accumulate what I need I'll pull it out and retire.
Tod. |
