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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (40260)	1/8/2001 1:12:06 AM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 42787

You make great points but unfortunately, it is too early to say if we are in a 80s Japan or 1929 type market environment. We have bled off much of the excess already although I agree there is much more blood letting needed in some sectors. The internets are gone, the B2B and B2C sectors have been decimated with only about 3 survivors in each category etc. Yardeni's model of valuation which uses the historically accepted PE over ten year note yields has us down to only 5% over valued as I think you posted on CFZ. While the excess we had earlier last year almost guarantees an over shoot to the down side, the recent over shoots of the 80s and 90s have only been down to about 5% under valued and since earnings lag, we should get a pop this quarter in those models after this reporting period. Many companies will still post good earnings such as SUNW, EMC, GLW, etc. in hindsight since earnings are a rear view look. Next quarter and the one after that is when we will see the real slowdowns in numbers but that will be long enough out to move the valuation model earnings up putting us around par I believe. I think earnings growth was estimated to grow around 7% this quarter so in a couple months , assuming flat stock prices right at the 29 December levels, we would come out the other side undervalued by around 2% assuming everyone makes it. ( I know Big assumption -g-) I still think we have more downside later but feel we are nearing the lows for this cycle and the risk level is now better for longs than trying to squeeze the last few crumbs out of shorts if you are trading mid term as long as you pick your targets and entries carefully. I am also not saying to buy tomorrow's open either!!! Of course there are some great shorts still out there and I am talking the NASDAQ and NDX since that is where most traders tend to focus. I think the DOW is due for some TL as investors realize that the brick and mortar aren't immune to a slow down. We are seeing safety buying now but I think they are wrong. Natural gas is already trading up again tonight to 9.70 and oil is creeping up as well around 28+ a barrel. We still have all of January and February to heat those big factories and run all that heavy industrial equipment. That won't help matters. Good Luck, Lee

To: patron_anejo_por_favor who wrote (40260)	1/8/2001 8:40:07 AM
From: JRI	Respond to of 42787

Patron, what then do you make of 1998? When many major money center banks were on-the-hook to LTCM and Russia, etc.... Weren't these banks as overextended (in that situation) as banks currently are? Also, it appears that the dot.com's/small telecom suppliers....weren't they the largest part of this round of >malinvestment"?...and, if so, aren't these firms living in their own beds now- unable to secure loans, and dying slow deaths...I don't see where they are being "propped up". If so, who is propping up these companies (I don't see it?)....Also, I believe it is not just the little guy getting hurt....major tech cos. (Dell, Intel, Msft) own significant shares, albeit at a much lower cost basis, venture capitalists are still on the hook in many cases (albeit on a much lower cost basis)....in additional to banks having to right off bad loans...so, everyone seems to be in the soup here.. Also, in 1929, didn't the U.S. gvt. start a trade war which contributed significantly to the world slowdown? I don't see that happening now....Japan's system has always been highly inefficient and protectionist....it didn't catch up to them until 1990... In my mind, energy concerns seem to be as big, or a bigger concern here...that is a joker that we don't seem to be able to control...