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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Denice who wrote (34625)1/9/1999 12:52:00 PM
From: SliderOnTheBlack  Read Replies (1) of 95453
 
Oils & a recession...bubbles etc.

Personally; I don't think a recession is on the horizon; if so - a very mild one. I do however believe that the valuations in the overall market, especially techs & the nifty 50 stocks are way too high. The reversion to the mean will dictate that small caps, commodities, cyclicals and value investing will all return to vogue in due time.

While it is hard to argue against a ''new paradigm'' given the prevelance of 401K accounts, ESOPs, IRA's and the tremendous flow of cash generated by the baby boomers in their peak earning years/curve; I think the ''Bubble'' is of valuations/PE's. The markets breadth will be the benefactor, small cap growth companies and downtrodden value sectors like Oils or Steels will benefit. More people will see the value of bonds and non-stock investments given a couple of market crashes/corrections.

I think the Oilpatch stocks could go to OSX 85-95ish even in a mild recession as crude oil recovers. Even if the US goes into a mild recession; the Asian demand recovery coming off of a historic bottom,with even a moderate, worst-case scenario rise in demand, will off set the demand softness in the US imho.

Personally; I think the Fed will cut rates next summer again into the face of rising ''recession'' commentary - given what I think may be slight to moderate disappointing Q1 - Q2 earnings by US companies.

just my 2 cents; I don't see a major recession threat, but I do see DOW 7500 as a real possibility on a correction.I also see the OSX rising to 66-72 no matter what happens !
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