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

To: Dealer who wrote (27971)	1/2/2001 10:27:08 PM
From: piscatologist	Read Replies (1) \| Respond to of 65232

AG EDWARDS' Al Goldman....January 2, 2001 11:00 EST DJIA: 10,724.23 When, Not If The question is when, not if. No one knows when investors will regain confidence in the long-term health of the economy and the stock market, but they will. This is not an if or maybe situation. All one has to do is look at the history of the stock market and the long-term growth of our economy. Anyone who thinks our nation's financial health will stay iffy forever should put a sign on his or her back stating "the end of the world is near." If you are with us so far, then the only question is whether you should buy stocks now or later. The majority of investors will decide to wait until most of the economic questions are answered and they can buy comfortably and with a high degree of confidence. We believe they will pay a big price if they wait, as stocks will be much higher when it is easy to buy them. Most investors know in their heads that the time to buy good stocks is when they are down big and the time to do some selling is when they are up big. Yes, that is easy to say but hard to do. We advise investors to focus on the following facts. The economy has slowed to a healthy and sustainable rate of growth. Parts of the nation's manufacturing sector have probably slowed more than the Federal Reserve had in mind as interest rates were raised six times. The spike up in energy costs put an additional and unexpected brake on economic activity. The Fed will soon start cutting interest rates, and a friendly Fed is very bullish for stocks. The one positive of the severe stock market correction is that the market appears to be almost 15% undervalued. A bargain such as this does not come around often. Two additional reasons to buy stocks now is that there is a great deal of liquidity on the sidelines and little enthusiasm about the stock market in 2001. Someone would have to have been in a coma for the past four months to not know that economic growth has slowed and corporate earnings growth has decelerated from an unsustainable rate. What everybody knows is already discounted by the stock market. What isn't discounted by stocks is that better times lie ahead. This is the time to look beyond the valley to the peaks that have always been ahead. It is too soon to know what the new administration's economic policies will be and how successful they will be in getting things approved by Congress. The good news is that expectations are so low that almost anything constructive will provide a very pleasant surprise to investors. Tax selling pressure is over, year-end contributions from retirement plans will be flowing into mutual funds, and the Fed will cut interest rates by its end-of-month meeting. We are set up for a good stock market this year -- the question isn't if, it is when. Alfred Goldman Chief Market Strategist