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Strategies & Market Trends : The New Economy and its Winners

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To: Lizzie Tudor who wrote (47857)	1/24/2009 12:38:13 PM
From: fedhead	Read Replies (1) of 57684

I am not saying this will happen in 2009. The average secular bear market in the US has lasted 16 years and has ended when valuations were at single digit PEs and yields above 6 to 7 %. So assuming this secular bear started in 2000 , I expect the lows to be hit between now an 2016 maybe longer if the govt intervention keeps postponing the recovery. if we look at historical bear market trough valuations Dow 1500 shouldn't come as a surprise. I am sure we will have the usual intermediate bear market rallies as the market discounts tepid economic recoveries. I expect the economy to keep sliding in and out of recessions for the forceable future as the economy works out the debt overhang. I also thing we would recover a lot sooner if the govt stayed out of the way and not prop up insolvent institutions thus zombifying them but thats not going to happen hence my bleak outlook. Anindo

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