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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Lone Ranger who wrote (1479)	9/23/2001 2:34:37 PM
From: marc ultra	Read Replies (2) \| Respond to of 10065

sayrep re<<<<were there exogenous events in 98?>>>>> Absolutely.. In 98 as I recall we were just trying to pull out of the Asian economic collapse followed by total collapse of Russia economically further followed by the icing on the cake of Long term Capital Management mega hedge fund debacle. At least I think they all occurred in 1998 leading to the lows. However I must note the situation was far better in many ways in 1998 than now. The US economy was strong and we were clearly in an overall bull market. The monetary stimulus at the time was a response to purely exogenous events that had little clear immnediate relation to the US economy. Now the US economy was in the tank and now sinking faster. We are in a long bear market and the rest of the world is doing poorly also. Also 1998 was before the parabolic tech/internet telecommunication mania was in its full stride so valuations were on the more reasonable side going in. So fundamentals really are worse now but at some point the market will predict some recovery well before it happens. Also while P/E ratios may remain extended that is based largely on atrocious earnings at this time, the earning part should go up dramatically when the economy finally starts to turn and business orders new stuff and people are comfortable spending lots of money again. Historically the market is now in a weak time period but Oct/Nov is often the time for bottoms and testing. Marc