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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 674.96

+0.9%

Nov 25 4:00 PM EST

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To: wmwmw who wrote (13463)	5/10/1999 7:37:00 PM
From: Lee Lichterman III	Read Replies (1) of 99985

>>So, what pushed the market from 9500 to 11000? The companies earnings. The strong fundemantals. Not " great fool". I am not saying in this situation there is no profit taking, but its down side risk is relatively small.<< Then why are this years earnings per share growth on most stocks lower than they were 2 years ago with further slow downs in growth expected. Guess I am the greater fool for not wanting to pay twice the price for half the performance. MU was a much better buy this year at $80 and a $1 EPS loss than it was last year at 20 a share and only a break even EPS. Of course now it is even a better buy at 40 with a 1 1/2 dollar per share loss and an even weaker outlook for DRAM. Computer stocks that are FINALLY admitting they are a commondity are bargain buys now too since they all are starting to lose money or at least see growth slowing. The old DOW stocks that finished growing eons ago are a real bargain now that their PE ratios are triple their historical values. <ng> I am so nice, I will let you buy them all now and I will get them at the garage sale that will be coming some time in the near future (1 month to 2 years) I am patient. Old PE ratios were in the teens when the earnings growth first started , they are now in the 30-40 range with the end of the growth cycle looming near if not already past. Only if you wear rose tinted glasses can you not see the writing on the wall. As many have already stated here, the mania can continue for quite a while but it will end and the longer it takes to end, the uglier the end result will be. That is OK by me as I will have more cash later on than I have now and the overshoot to the downside will make the bargains even better. Also crude DOES affect inflation since plastic is petroleum based, transportation costs for both delivery of goods and the workers themselves all play into costs, not just the furnaces and engines of the manufacturing plant. Would write more but my program is on. I have to find my rose glasses while they talk about how great this market is. <ggg> Good Luck, Lee

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