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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (2409)	3/16/2001 4:21:59 PM
From: oldirtybastard	Respond to of 74559

he's guessing, these dip buying pikers are all full of shit. bull shmull, present value of future cash flows...so where is this cash going to flow from besides Uncle Al? I'm thankful for the optimism that still abounds, otherwise I might have to find a new profession when there is nobody left to take the other side of the trade and hold it while denial sets in.

To: Tommaso who wrote (2409)	3/22/2001 2:15:07 PM
From: MeDroogies	Read Replies (1) \| Respond to of 74559

Well, that all depends on what you consider the length of the last bull. I view it as a 5 year bull rather than a 15 year bull. While it is true we have had 15 years of growth, there are many underlying trends that led to this. 1. an inflationary overhang from the previous 15 years (1970-1985) 2. 401(k) pressure and the growth of mutual funds 3. technological dislocation leading to vastly improved productivity. These are but a few. The primary reason for the last 5 years is #3 and the over reliance on beliefs that this was "the end of the business cycle" because computers allow us to manage inventories so much better. While it is true the business cycle is better managed, it certainly still exists. That comes as a shock to many true believers. However, I'd say the next bull will be more like the period of time from 1985 through 1994. That was the "dependabull" or "permabull" that had a number of dips, but was steady and in line with reality. The business cycle will continue to exist, but it will be better managed. I don't think CEOs will go out on the kinds of limbs that John Chambers and his type went out on in the past and predict growth forever. That won't happen for another generation now. So, I'd say the next one will last 10 years minimum and see a doubling/tripling of all major indexes in that period of time. Depending on the factors of fear and greed, you will see substantial rises and falls, but the long term trend will remain up. In 1998, I looked at the direction of the Dow in comparison to 1929, correlated with underlying indicators. While the Dow was overextended in 1998, 1929 was still much, much worse. The Dow overshot in late 1999, but we're pretty much back to those levels. Unless you feel that it's going to badly undershoot here (always a possibility), it doesn't make much sense to be totally out of the market. I'm not saying buy, buy, buy. But certainly not sell... There are some who say that if you overshoot, by definition you have to then undershoot. There is not a single shred of evidence that this is true. That it has happened, is true. That it is a rule is not.