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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (27861)	1/1/2001 9:16:36 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

The Coming Week: Wall Street Resolves to Get Back In Shape By Justin Lahart Associate Editor TheStreet.com 1/1/01 12:30 AM ET The new year is coming and Wall Street took a good look at itself in the mirror the other day and decided there are going to be some changes. In '01 (Wall Street says this ought one and hopes it catches on), there will be no more bingeing. No more latching onto the latest fad, chasing the crowd. No more of that greater fool stuff. (Wall Street has seen how engaging in that kind of thing has ruined its figure -- there are a lot of analysts and investment bankers hanging from its midsection, and one of the first things Wall Street plans to do next year is cut that fat out.) Wall Street also says that it's getting back to basics, dusting off its copy of Security Analysis and looking at things such as book value and price-to-earnings ratios like they matter. Finally, like every other year, Wall Street has sworn off those egg-and-cheese things it buys every morning from that cart on Nassau Street up from the Exchange. Enter the new year, and while for those investors who have survived there comes a certain relief in seeing the year-to-date return getting wiped clean, there's also a great deal of worry. Higher interest rates, higher energy prices and a worsening credit outlook -- to say nothing of some pretty serious losses in the stock market -- have hit the U.S. consumer pretty hard. As a result, the economy is decelerating at a pretty quick clip, and many worry that the Federal Reserve is moving too slowly to head off a possible recession. "I'm just afraid the way these markets act, the worst is not over," says Jim Volk, co-director of institutional trading at D.A. Davidson. "People are still confused over whether we're going into a recession or this is a soft landing. With that kind of uncertainty, there's very little reason for them to rally." Despite such worries, some are finding reason for cheer. On a valuation basis, many market watchers who had spent much of the first part of 2000 grousing about how expensive the market had got, now believe that stocks are reasonably priced. The P/E on the S&P 500 has slipped from a high of 31 in the spring to around 23. The Nasdaq Composite has been halved. Dell (DELL:Nasdaq - news), which used to be the poster stock for heady valuations -- at least before companies like Qualcomm (QCOM:Nasdaq - news) came along -- carries a P/E that's in line with Gap's (GPS:NYSE - news). Finally, it's pretty clear that the Federal Open Market Committee will be cutting rates at least 25 basis points by its meeting in late January, which brings up an old adage. "I take 'Don't fight the Fed' to heart," says John Bollinger, head of EquityTrader.com. "If we start to get a strong bounce in early January, with the low-priced and damaged stocks doing well, that constitutes an all-clear signal. I'm mildly constructive and could easily see how I could bet to be very constructive. In contrast, I find it very hard to imagine myself getting bearish here." Whether Bollinger gets his wish, and stocks start off the year well, has everything to do with a raft of economic data due out in the coming week, and how the market reacts to it. On Tuesday, we get auto and truck sales (probably not good -- shocker there) and the Purchasing Managers' Index. Wednesday brings Construction Spending and on Thursday comes Factory Orders. The most important comes Friday, though -- the December Jobs Report. The key thing to look for there will be the unemployment rate. It's thought one of the things that kept the Fed from moving to an easing stance earlier than it did was a persistently low unemployment rate -- the hawks on the FOMC worry that cutting rates in the face of that would invite inflation. Conversely, a greater-than-expected increase in the unemployment rate could stir the Fed to more aggressive action. Miller Tabak bond strategist Tony Crescenzi suggests that a weak report could even lead to an intermeeting rate cut. "In 1991, the Fed cut rates on employment Friday four times," he notes. "There's something in the Greenspan psyche that makes him want to cut rates when employment numbers are weak." Could it happen? Although Crescenzi believes the odds are stacked against an intermeeting cut, he's not prepared to reject it out of hand. December was not a very good month for the economy. Sales were sluggish, a number of confidence indicators slumped and high heating costs combined with cold weather packed a wallop. While few economists are forecasting recession, most would say that the odds have risen pretty dramatically. Moreover, on Friday the Conference Board's Help Wanted Advertising Index, which correlates pretty well with the unemployment rate, dipped to its lowest level in seven years.

To: Sully- who wrote (27861)	1/2/2001 10:00:51 PM
From: crdesign	Read Replies (2) \| Respond to of 65232

Although I've scaled back my postings on the Porch to "few if any." I feel it's necessary to come to the defense of Tom and his tremendous positive perspective on life! I may not always agree with his stock picks or his peculiar manner in how he communicates with the opposite sex. However, people like Tom, JW, and RR have the unique ability to lay it on the line, say what they truly believe, and live with the consequences of thier opinions! For that I have the greatest respect for them. I hope I someday can be half as confident as these men demonstrate themselves to be on a daily basis. Often when I read the dissenting posts of the "Voltaire Bashers" It takes a mere few sentences of their post to recognize these same dissenters more than likely are the same people who at their day jobs have a million and one excuses as to why a project they participated in may have failed. Nine times out of ten failure is usually due to their inability to welcome risk. To the dissenters I offer this bit of advice: Sell everything you have carelessly dumped into the Stock market, march down to your corner grocery store and use those dollars to buy state Lottery tickets! You crybabies will find more satisfaction scratching the silver off of a piece of cardboard in hopes of finding gold. B-I-N-G-O! As for me I plan to stick around, keep my mouth shut, scratch my head and balls and continue learning from past mistakes of myself and others who aren't afraid to broadcast their thoughts and take calculated risks. My only regret of this 'Fine Porch' is that it became moderated... Keep the coarse reviews coming, Timster