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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (36374)	1/1/2000 4:17:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 99985

K, that is true, the 1 million Dow just sounds excessive and there is the infered belief that things will remain as they have been, somebody probably made a similar reference about the british empire around the turn of the century, going into 2000 the sun doesn't set on the american empire (McDonald's at least -gg-) who's to say that something may come along to change that, and about that compounding, markets move in surges, most of the gains of this century came in the last 60 years, it's not a risk free bank account like many now think. Answer me this, in the greatest bull market of all time, with us fanatically trading $ 200% of gdp and business so great why are the brokers horribly lagging the index? and the repeal of Glass Steagall, another sign of confidence.

To: KyrosL who wrote (36374)	1/2/2000 1:28:00 AM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 99985

>>Historically, stocks have risen 9% a year on the average<< You make a good point but this can be read either bullish or bearish. Since the last 18 year bull market has seen growth greater than this average, then I would say it is hard to forecast 9% growth from here on out and instead view that the forecast at least calls for a slowdown to average out the past stellar gains back to the norm of the 9% figure. History would show that we either need to go sideways or drop before we can count on another long run of 9% average gains. I would point out however that I see two possible scenarios. Either we have a high flyer correction to knock the averages down to more historical valuations OR we have either a minor correction or flattening of the high flyer stocks and the Huge number of stocks that have gone negative and flat since April 98 finally start to take part in the bull market and contribute to market gains. It takes a lot of the smaller issues to move the indexes in comparison to small moves in the largest fast movers. I actually think we may do the 2nd scenario but with many of the high flyers getting seriously slammed in the not too distant future i.e. 6-9 months. There has been a HUGE number of negative news on PC and server sales over the last couple months that the market has chosen to ignore. I expect a big tech leader to miss either this quarter or the next quarter that will impact us like INTC did in October 97. The big question is can you play the long side and guess when to get out before the news? I am actually bullish on many stocks right now but as usual see a lot of negative potential out there as well. Unfortunately this market left fundamentals long ago so the safest and most bullish stocks have not always been the ones that move up while the most ridiculous ones often do. I agree with heinz in that there must be some really bad news we don't know about yet however I also throw out the possibility that the banks may have already factored that in to a large degree. Broker stocks have had huge growth yet their stock prices haven't really moved too much looking at them broadly and not just the few winners. Each huge surge in price has led to a slow bleed off back to the lows. Will someone blowup when the truth comes out, possibly. Banks are extremely weak also. I have no doubt that some of them will blow up when a large hedge fund gets in trouble. Also credit card profits are eroding quickly in the rising interest rate environment and with most "good" credit applicants already being tapped. They are now sending cards to bad credit risks that don't pay bills and believe it or not, dogs, cats, goldfish etc. With the record number of people in the market, soon as the market doesn't return more than the interest on the huge debt out there, even more accounts may go uncollectable. How much higher can techs go ahead of earnings growth. Good companies with bright futures are worth a lot but stock prices have outpaced even the most optimistic earnings growth this last year. As I posted earlier, technology changes rapidly and more so with each passing year. What kid in a garage is coming up with the replacement for QCOMs CDMA technology? What little start up company will find the software that will take down MSFT, SUNW etc? The market is nuts yes, but somewhere out there is a penny stock that will be the next QCOM, MSFT, EMC, SUNW etc and at least one or two of the companies I listed will become the next XRX. Already there are reports that someone has found better packet technology than QCOM's and a faster chip by far than anything INTC or AMD has on teh drawing boards. Can they get it to market ro will they be swallowed up by one of the existing Gorillas??? That is what makes this market interesting. <ggg> I drifted off subject but basically, yes the indexes could keep going up since they are so often skewed as old laggards are dropped and new fast movers are put in but history is history and if the long term says growth is 9% and we have been going 15-50% then the coming years should see negative or flat growth until the 1980s to 2010 average goes back to 9%. Good Luck, Lee