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

To: Stephen M. DeMoss who wrote (51380)	5/20/2000 10:59:00 AM
From: Haim R. Branisteanu	Read Replies (3) \| Respond to of 99985

Steve D. all what you are saying is right in retro respect. I would also liked to know 3 to 4 years ago that people are so clueless about financial affairs and this administration will do every thing possible to prop the stock market to stay in power. (remember AG speech in 1996 ?) From a fundamental point of view, the market is overvalued for the last several years but also due to the SE Asian debacle and strong dollar policy. More so the large US trade deficit was invested in US financial markets, which propelled US paper assets and real estate higher. As a result many in the US are much more richer at the expense of the world at large. (see siliconinvestor.com Take into account that saving in their historical aspect are non - existant and now the Stock Market is the "Saving account" which perception by itself is very wrong. In a nutshell the market will move with the dollar, and a high dollar will mitigate any stock market down turn, but as always the mood can change overnight if for some reason dollars are repatriated or people will perceive other currencies undervalued. Still short term I think the energy sector is the key for the dollar direction, any weakening in oil prices will benefit the dollar as interest rates in other currencies will remain steady. As to the outlandish NAZ valuation they will grind down. The market is up as there was a tremendous P/E expansion in many stocks as the investors at large eliminated a big part of the risk associated with the purchase of stocks and therefore the high stock prices. One example is HWP the company earned the same amount this year as last year around $900 million but the stock is trading around $130 as compared to around $70 last year. So we had almost a 80% rise in stock price for the same earnings in an interest environment which is around 20% higher. (TNX now is 6.5% versus 5.25% last year) On a apple to apple comparison - earnings versus risk free 10 year treasury notes, HWP stock should be apx. 20% lower from last year levels or around $55 but it actually is 135% above this value. Now this is not counting for the new valuation formula which counts for anticipated earning growth which in HWP case is ZERO. ......... So actually HWP should trade even lower. HWP is not the exeption but the norm and therefore the market is very prone to a nasty surprise. As to your remark about a booming business there is a 6 to 9 month lag between stock markets and purchasing / wealth feeling factor as hopes spring eternal BWDIK Haim

To: Stephen M. DeMoss who wrote (51380)	5/20/2000 12:24:00 PM
From: PoetTrader	Read Replies (1) \| Respond to of 99985

Here here Stephen...I too am a fundamentalist...wish there were a few more on this thread as it is an excellent example of what SI can accomplish with wonderful posters... and sure nice to have some hand-holding during these days of strife. PoetTrader

To: Stephen M. DeMoss who wrote (51380)	5/20/2000 1:37:00 PM
From: el paradisio	Read Replies (1) \| Respond to of 99985

Stephem, The market is much more ahead...I am not saying,we are going into the recession, but the current valuation does not correspond to the projected GDP growth. el