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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: jmootx who wrote (72900)	3/20/2001 5:36:42 PM
From: Doug	Respond to of 99985

jmootx: You seem fixated on a recession. I dont believe that is the case. You have to look at each Industry and each sector to discover the extent of over Capitalization that has occurred. Companies that have steady growth of capital assets ( 10-12%) are doing fine. The Companies in trouble are the ones who cannot maintain their earnings/earnings growth to match their price.

To: jmootx who wrote (72900)	3/20/2001 7:30:51 PM
From: Wayners	Read Replies (2) \| Respond to of 99985

Yes definitely right about the history. Once the earnings get depressed however, the P/E's can stop working because the earnings are so low (in comparison to book value) and everything is trading at 1 to 2 times book value and people forget to subtract book value from the current market price before doing the P/E calculation. The thing to watch IMO is business inventories. Data showing noticeable reductions in inventory are going to be key. Are there any other leading indicators? Also seems to me that the Dow is the last the fall and should also be the first to recover. People start to throw out the blue chips with the bathwater last.

To: jmootx who wrote (72900)	3/20/2001 7:34:55 PM
From: Wayners	Respond to of 99985

One other thing about the history. In the 1929 to 1933 bear, the asset bubble took a lot of banks to the cleaners and caused some very dire consequences that took a decade to undo. What are the risks to today's banks as far as bad loans go? Seems like Wall Street has been ignoring this for the past year as I frequently see financials rise, especially in anticipation of rate cuts.

To: jmootx who wrote (72900)	3/20/2001 8:05:56 PM
From: gc	Read Replies (1) \| Respond to of 99985

Are you sure it was 90% decline in DOW during 1930's? I don't have recollections of that. Maybe my memory is fading. <g> Many tech stocks have already dropped from 100+ to single digit. What the difference does it make if it drops to zero? If you were yhoo shareholder, I guess the pain is the same when it drops from 250 to 14 or from 250 to 0.