Luc wrote:
I've read about economists making about why the mkt could go to even more lofty levels before the 1929 crash
I think you are premature (not wrong). It is unlikely that the current market will develop into a bear market at the current time. Despite your point by point following, the last sucker has not yet booked their tickets on the bull ride up. I think you are likely to see a blowoff period where prices skyrocket upwards before any sort of a bear market set in. We caught a whiff of that in the past few weeks with the "internet" plays, but we have survived intact when this sort of thing happened with IOM and Netscape before.
IMO, We are overdue for a really nice 8-10% decline in a bull market, but a bear market? We just aren't there yet despite the p/e's in MSFT, DELL, KO, G and the other new nifty fifty. Demographically, the boomers will keep pouring money into the market until buying the dips doesn't work. There is no evidence that that sea change in their attitude is about to happen. If anything should have scared them it was the crashette in October, but they came back after only a brief pause.
This bull market is going to end ugly simply because the earnings growth is nowhere near robust enought to support the multiples without all that cash flowing in. Once it stops, it will unravel to the downside as you fear.
For an analogy, were are closer to the end of 1927 than the summer of 1929.
One point you might want to ponder is the flow of cash from the EU countries toward the US as they put money into our markets (bonds and stock) to avoid the coming conversion.
11. stock mkt is everywhere. I have noticed over the past yr more and more mutual fund, and brokerage commercials on mainstream TV, radio and print. There was even an article in Rolling Stone about the "roaring mkt"
Well, we haven't yet got to the point where it is the major subject of a sitcom TV series. Do you remember the "Leave it to Beaver" episode where Ward tried to convince the Beav and Wally to invest in utilities and they bought an aerospace penny stock? ;-) I haven't seen that sort of thing on TV yet, but it will come. {Lifetime's aborted Traders show doesn't count]. |
