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Strategies & Market Trends : TATRADER GIZZARD STUDY--Stocks 12.00 or Less..... -- Ignore unavailable to you. Want to Upgrade?

To: TATRADER who wrote (24622)	7/29/2001 7:03:15 PM
From: gold$10k	Respond to of 59879

Mark, thanks for the encouragement! I am definitely hanging in there. As I probably have said before, I am expecting a 1960's/70's type scenario for the next 5 to 10 years. My Rydex account has direct access to a 2x NDX fund when the time is ripe and also a 2x inverse NDX fund for next April/May if Zeev's calculations are correct. I expect those trades to last some number of months. Gold is the only thing that interests me long term. I have been reading Robert Schiller's book "Irrational Exuberance". There's nothing new to me so far in essence, but on page 6 there's a chart of the REAL (inflation adjusted) S&P Composite Stock Price Index along with the REAL (inflation adjusted) S&P Composite earnings dating back to 1870, which is a real eye-opener. REAL earnings have risen from 10 to 40 (4x) in that time. If I were to draw a more or less median straight line through the prices, they would show an increase from about 80 to 320 which is the same ratio of 4 to 1. This echoes Warren Buffett's adage that over the long run, stock prices follow earnings. However, REAL prices at the beginning of the year 2000 were at 1400, implying that stock prices at that time were overvalued by 1400/320 = more than 4x. By comparison, the bubble of 1929 reached a REAL price of maybe 300 compared to the median line at 150 (2x overvalued), and the bubble of 1966 reached a REAL price of maybe 500 compared to the median line at 150 (3x overvalued). This chart alone gives perspective to how historically overvalued the market is... and not just the NAZ. Of course, you can't say this on TV because it's bad for business. <g> Best, vt