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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (17562)	9/3/2001 1:17:00 PM
From: Lee Lichterman III	Read Replies (3) \| Respond to of 52237

Gersh - I fully concur with you. I get a real kick out of these people that want things to go back to the way they were. Right now the SPX is still over valued by historical measures by almost 40% on a plain and simple PE basis and 10% by the fed's model using dividends, cash flow etc. People can't seem to have it sink in that it was a bubble, bubbles are bad and no one in their right mind should want a return of the bubble. What we had in the last part of the 90s was gambling, not a stock market. Everyone was trading slips of paper based on the greater fool theory hoping that someone else would pay more for that slip of paper and the paper no longer had a link to the actual fundamentals of the company. Stocks are a simple thing which most people either forgot or never knew which should have been the first thing they learned. A stock certificate is a means of providing a loan to a company so that they can run a business with the express idea that that company will return via dividends, more money over time than you originally loaned them. Stocks are basically like bonds but with out a time limit or "guaranteed" return. As thus, a stock should return a higher yield than a bond over the long haul. In the midst of the bubble, hardly any stocks that people wanted, paid a dividend nor had any real hope of paying one since there were no "real" earnings. Pro Forma accounting made things look OK but in reality there was no free available cash that they could have paid to investors had they wanted to. While everyone moans about wanting a return to the bubble days and get mad as their portfolios are down, the "real" companies are finally catching bids and moving up. Note on our site we have been discussing transports which have gained 50% in the last few months, food stocks that have almost doubled, clothing manufacturers, industrial supplies etc. They aren't glamourous but many pay dividends, have increased in stock price and have real earnings unlike these pipe dream stocks that everyone wants to see go up again so the casino can re-open. I think everyone will eventually get their cake and be able to eat it too. if history has shown us anything, it is that there is always another mania just around the corner. Krispy Cream anyone -gggggg- Good Luck, Lee