Dear AG: Here is my second entry:
2) Don't laugh, but I believe that we're already in a bear market. Many, many stocks (particularly small and mid-caps) with significant value (following traditional valuation methods) and others that are out-of-the-limelight (and over-valued) have been trending down since the end of January. Only a handful ofthe well-known, popular big names and numerous speculative I-nuts have trended up. Because these stocks are always spoken about in the media, it gives the impression that we're still in a Bull Market. Also, I believe that the indexes have deftly "seeded" their respective indexes with stocks which have a "positive" bias, which hides the tenor of the overall market and, again, leaves the populace with the impression that we're still in a Bull Market. On top of that, with the commodity markets remaining depressed and gold in the doldrums, people don't sense danger. Rather they are pleased that they can buy more with their paychecks. This facade may continue for awhile, but as my concerns relate to the contest: I believe that my observations will start to be discussed in the media. A correction will start led by Dell, Intel, Microsoft, Coke or IBM or the like (for a seemingly innocuous reason). Then the Contest Five will sell off as the correction expands to the speculative stocks. It will be nasty. My timetable: March 15, 1999 will be the start of the Contest Five decline. |
