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Strategies & Market Trends : Waiting for the big Kahuna
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To: robert b furman who wrote (22693)7/29/1998 11:16:00 PM
From: bobby beara  Read Replies (2) of 94695
 
Bob, there may be something to what Thomas C is getting excited about.

>>>So why is the future profitability of our corporate sector deteriorating to justify a crash?<<<<

Valuations are stretched at historically high valuation levels based on a high level of (irrational?) expectations. The real world conditions of declining earnings, Asian problems, etc. have been ignored in the bubble mentality, new era momentum trading, bringing stocks even more out of line that many value managers considered out of whack for years.

If the bubble has been popped and you consider that the general MARKET PEAK IN APRIL, and this last run-up was a bear market rally of just a few high flyers dragging the indices, we could be in a dangerous period here.

If we are on the other side of the peak, crowd behavior will take on a whole new mentality. Panic is not out of the question, when the crowd finally realized the tulip they bought (AOL had as big or bigger a market cap than 11 Dow stocks) is way way over priced.

Markets don't usually crash off price peaks, but then again I hear old time investment pros saying they have never seen such a thing as this internet mania.

Will this time be different? It just might.

wantabee
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