Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jacob Snyder who wrote (36490)	1/3/2000 5:40:00 PM
From: Jacob Snyder	Respond to of 99985

My 2000 predictions: 1. long bond ends the year at 7.2%, the Fed raises rates a total of 0.75% in 2000, because the CPI is up 3.5% for the year 2. inflation finally makes an appearance. Yes, I know, I predicted this for 1999, and I was wrong. But wage pressures are inevitable with an unemployment rate at around 4%. And the global economic recovery will give US companies the pricing power they've lacked in 1999. And commodity prices aren't going down. 3. Stocks: The S&P 500 ends 1999 at a trailing PE of 33. Wow. I'll make several predictions about this: that PE can't go higher. That's another thing I've been wrong about through 1999, but I continue to believe in Reversion to the Longterm Historical Mean. 4. If the current PE is the peak, and earnings increase by about 10%, that implies a maximum upside of 10% for the S&P 500. 5. The potential downside: I predict the S&P 500 will hit a PE of 25 (using trailing earnings) sometime during 2000. That implies a PE contraction of 25% from today's levels, and a larger contraction if the PE goes any higher.