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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (31707)	6/4/2000 2:18:00 PM
From: Bart	Read Replies (2) \| Respond to of 50167

Ike-Great post! This is where the "rubber meets the road". How come these so called analysts can't state things so clearly ? The "encatchment area" of a particular company is the key to its future potential. That one idea makes P/E ratios and PEG much more understandable. These type of posts are like a free Ivy League Business education. I just felt the urge to come out of lurker mode to express my continued admiration and appreciation to the master and my mentor. Ps. - I received a 7 figure offer for my 2 year old company. If I accept it. I will be back to full time trader status.

To: IQBAL LATIF who wrote (31707)	6/4/2000 8:26:00 PM
From: Shtirlitz	Read Replies (1) \| Respond to of 50167

Great post. And you are absolutely right, The economy will most likely keep growing for a while even if it is a slower pace. There is no recession on a horizon yet. However,... Economy is one thing and stocks are a completely different story. Lets look five years back and try to understand what has really happened to the stock prices. The old argument, which I feel is very appropriate to raise again. The economy output has grown about 35% during the past 5 years. At the same time stock indexes have grown 200%+. Where did this growth come from? Obviously from the expanded multiples and premiums we are seeing in the stock prices today. S&P premiums have increased on average by 70+%, which pretty much makes up for the missing numbers. Increase in premiums seemed to be appropriate, when the economy was accelerating its growth. Now the situation has changed dramaticaly. The growth is slowing, and any acceleration attempt will be met by agressive Fed policies. Which means that if the economy cannot catch up to the stock prices, the stock prices should come back to the reality, or at least wait. This "asset bubble" has to be resolved sooner or later. That is my point. I don't see the room for the future growth in stock prices. Any unrealistic expectations will not be fullfiled. Productivity growth is also not eternal. You can give a worker a computer instead of paper and filing cabinet, but you can't make him type faster. Are we getting close to the top of the equipment upgrade cycle, which has started 5 years ago ? Frankly I'm surprized that the market ignored the low and much lower than expected productivity growth last quarter. Because if not for productivity, this market doesn't have a bull case at all. So where is the point, when you decide thasts'it. I don't want to pay higher premiums. This is the hardest question. But stocks are certainly becoming an unattractive investment. Too much risk, volatility, uncertainty. And thats not considering the fact, that they are pretty pricey. Where in this market do you see value ? Everyone is recommending financials lately. But look at them, they are trading at huge premiums to book value, when 2 is already a very richly valued ratio. No matter how great AXP or C look, I think that paying 7 Price/book for them is a great stretch to say the least. I'm not even talking about techs here. PEG ratios of 10+ are not something that attracts me as investor. Are we at the point when the liqudity will start leaving this volatile market, or the stock chasing mania is about to continue ? I don't know. I'm staying in this market as a trader, But my investment capital isn't coming back into this market, despite of any promisses of a big "summer rally". This is traders market. And as a trader I love it, but as an investor I hate it. So most likely I would expect liquidity to start leaving it on any run-ups. And leave this market to maniac traders, who are thriving in this volatility. Support for this market by large investors is drying out. Investors are getting scared away by the maniac casino type market action and questionable fundamentals. And this is a big problem.

To: IQBAL LATIF who wrote (31707)	6/6/2000 2:35:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

I would continue with this post recommendation... we have as mentioned moved and tested thsi 1455 area couple of points higher than that low mentioned here but the gap on NDX has reamined unfilled it was expected by many and still is, in my opinion we are seeing accumualtion in many leading stocks and PSIX KEYN CPTH in the lower tier whereas PMCS JNPR BRCD BRCM JDSU in the upper tier are basing at higher level, alongside the IIX DOT for the first time is consolidation above the 25 days MA so for me a rally is brewing coming from the depressed sectors of the market, if we hold this 1455 support in next two sessions the way is definitely up, we had retraced from 1489 area but the parameters of this post remain intact going forward the Comp target and IIX DOT target is 4200 530 and 880 area.. <<Friday, Jun 2, 2000 1:32 PM ET Reply # of 31736 James.. Every one is looking to fill the gap, no one really thought that these interest rate hikes have started working, now everyone wants to load up cheap but I don't think that environment is conducive for such a fill, I would assume that we hit 1492 and back down to 1455 before that gap is filled, you need massive selling in SOX BKX DRGs and NWX sectors as IIX and DOT are already beaten down and just coming up to that 25 days mA which has become a proverbial top of these sectors, if this 25 days Cobot timer turns around this can get real melt up process. This market has caught a lot of people on the wrong foot and I don't think that it is going to be that easy to get out of shorts, everyone wants to see 1428 to square but market may like to take them to 1500 and get them squared their and than to retest this 1442 area or 1455 may be,..bullish sentiment until ast night was at all time low and in this kind of environment I don't think ideally they would be spared a chance they did get four chances when we were testing 1382 so here we are looking at run to 388 and than 4200,, but slow and steady and real chinese torture is on cards probably for anyone with shorts.. >> Lets see how much this can be really seen..