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Strategies & Market Trends : Value Investing
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To: Bob Rudd who wrote (4994)9/12/1998 5:00:00 PM
From: Ron Bower  Read Replies (2) of 78476
 
Bob,

Not being familiar with tech terms, I may have used the word 'resistance' wrong as it relates to the market.

To clarify my statement, IMO investors have been used to the growth of recent years and will strive for a better return than most bonds rates offer. The funds would have to outperform bonds to keep investors. While the foreign markets may now offer some opportunity, most investors are tentative about investing anyplace but the US, even foreign investors. All of this will prevent the US markets, particularly the DOW, from reaching levels commensurate with corporate earning projections.

With the lower US markets, there will be a shift back to foreign markets as the value oriented investors look for growth. The heavy losses suffered by the hedge funds and new restrictions placed on trading by the emerging markets to prevent market manipulation will produce markets that are fairly priced as to risk and value.

There are benefits to the current world situation. The emerging markets have learned caution. Companies that have been benefiting from the strong growth and high earnings will learn that it's possible to expand beyond consumer demand. Banks and management will learn the importance of liquidity on the balance sheets. The list goes on, but you see what I'm driving at. This period will weed out the poorly managed companies from the well managed and the next growth phase will be stronger and more stable than what we've been seeing.

JHMO,
Ron


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