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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (49659)	7/24/2001 8:59:50 AM
From: michael97123	Read Replies (2) \| Respond to of 70976

Bob, I accept your notion of grinding action being bullish. One note of caution however, doesn't the market have to hold up here in terms of the averages. We have sunk into the 1900's several times now and recently there has been no bounce back. I would hate to have this grinding action revisit old nasdaq lows and dow in the 9000s. Is it your belief that we will not go much lower on nasdaq and rally into a more comfortable zone? mike

To: robert b furman who wrote (49659)	7/24/2001 10:08:16 AM
From: Mark Marcellus	Read Replies (3) \| Respond to of 70976

Somewhat OT, again: No wonder individual investors are getting worn out.Three months of grinding trading has left only 40 %of Americans expressing optimism about the stock market,according to a Gallup and UBS Paine Webber poll.It's the lowest level since the index was established in 1996. Of course the market is the master of reverse psychology.When the crowd can't stand stocks,its usually a good time to buy.}. This is very dangerous thinking. I can be contrary with the best of them, but there's no way that investor sentiment is low enough to indicate we're anywhere near a market bottom. When and if we do get there, I've got a feeling this IBD guy is going to be urging everyone to buy government bonds. When taken at face value, that 40% number is misleading. Saying we're at a low point for investor sentiment over the last 5 years isn't saying much at all. And while 40% is a little low, it's hardly apocolyptic. But even that low a number surprised me, given some of the other sentiment indicators out there. For example, the current AAII poll shows a bearish reading of only 15.2%. I was curious enough to go to go to the Gallup site, which shows the results of the 6/26 Paine Webber poll, and take a look behind the numbers: gallup.com This excerpt is telling: Despite the low level of investor optimism that appears to reflect mostly short-term concerns, investors seem to be bullish about the long-term prospects of the economy and the stock market. On two important measures, investors predict much better performance in the coming year than they did in the past. More than half, 54%, of investors expect the stock market to be higher next year than it is now, while just 9% say lower -- little changed over the past four months. In addition, investors' expectations for return on their investments over the next twelve months is an average of 10.7%. While that is one point lower than the 11.7% recorded last month, it is still much higher than the actual average return of 4.4% reported by investors for the past year. I defer to the well documented ability of many here to call industry specific turns. If you are convinced that you have a firm handle on the fundamentals of a business, and you are convinced that business is near a bottom, by all means go for it. But backing up the truck based on a perception that investor sentiment has bottomed is an invitation to disaster, IMO.