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

To: Math Junkie who wrote (50081)	8/2/2001 11:35:35 AM
From: Kirk ©	Read Replies (2) \| Respond to of 70976

Actually, the market predicted the recession or "profits recession" rather well. I don't think you can use absolute levels as the lemmings seem more than willing to over pay for stocks in fashion, but if you pay attention to valuation I think it does carry a message. For example, what do you think mid and small caps have been telling us? I have a small cap value fund that is up 18.1% YTD (FLPSX). That fund did 18.8% in 2000. Hardly a bear market. That fund had near zero exposure to tech at the top (so it barely beat money funds in 1999). To me, the message was pretty clear "Tech was over valued" and the market seems to be taking care of the problem much as your body uses antibodies. Robert: "I'm not looking for a v- bounce - I'm looking for long, slow, dull, boring consolidation. We will not see a MOMO market like 2000 for maybe ever." I agree that seems likely. That is why I suggested people reread his post. I'm on record as saying that I think we might see a tech recovery much as we saw after the 1987 tech bubble burst. I worked at HP back then and remember it took 4 or more years before the old high was passed for many stocks. IBM was setting new lows as late as 1993.... so some stocks took even longer to get their act together. Still, after the 1987 crash, it was a good time to be DCA'ing into the market while many were quite bearish as they are now. Being bearish when the market is low sounds smart just as being a permabull that never takes profits sounds smart at market tops. Kirk out