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To: Don Lloyd who wrote (125901)	9/27/2001 4:33:16 AM
From: Bruce Brown	Respond to of 436258

First Guatemala, then North Dakota. -g- Are there not more people in NYC taxi cabs at any given time than live in the state of North Dakota? ;-] thestreet.com Two of the three takes in that article: ===== John Bollinger, president of BollingerBands.com in Manhattan Beach, Calif., agrees lower prices are likely, suggesting some retest of last week's lows is "almost certain." But the "preconditions for a bottom are in place," he declared. Among myriad other technical indicators at oversold levels, less than 2% of major industry groups were trading above their 10-, 50- and 200-day moving averages last week -- an all-time low, Bollinger said. Additionally, the technician believes institutional investors capitulated last week, as evident by the "huge boost" in block trading and "massive put buying" on both an absolute and relative (to calls) basis. "You can say there was no capitulation, but tremendous damage [has been] done" to investor psychology, he continued. "Capitulation means different things at different times" but the "local variables" of last week's decline suggest "we have reached a climactic point in the decline." Still, Bollinger's outlook is for a "giant sideways trading range for the balance of the decade," not a new, roaring bull market. His strategy going forward is to practice "swing trading" in what he called the "old-fashioned sense of the word": Focusing on group sector rotation prescribed by "major moves" in daily and weekly charts. ===== Elsewhere, Stanley Nabi, managing director at Credit Suisse Asset Management, is bullish now after being bearish "for a long period," during which he "snickered" at those who spoke of "new eras." Having spoken to Nabi over the years, I can attest that he did. Some capitulation has occurred, Nabi said, noting, "many of the people who were wildly bullish at the peak are [now] in deep depression." Steadfast bears will disagree, but he also argued the downturn that's occurred is "appropriate and consistent" with the size of the late-1990's bubble. The average stock in the S&P 500 is down over 50% from its all-time high, Nabi said, suggesting the correction has been even deeper than declines in the S&P and Dow indicate. (The Nasdaq is another story.) "The bottom may not come for several more weeks, but the value is very evident," said the veteran money manager, who oversees more than $1 billion. Nabi spies value based on the following: The last full year for economic recovery after a "significant recession" was 1983. Assuming a substantial recession is now occurring, he predicts 2003 is going to be the initial full year of recovery. Assuming 20 years of 7.5% compounded annual earnings growth -- the postwar average -- added onto 1983's S&P earnings of $14.03, Nabi derived estimated 2003 earnings of $59.75. The current First Call/Thomson Financial consensus is $62.50. Based on $59.75, the S&P is trading with a price-to-earnings ratio of about 17, around the postwar average. In addition, the market is 15% to 20% undervalued based on the dividend discount model, and "we're in a period of low inflation," giving the Federal Reserve flexibility, he argued. Certainly one can quibble with Nabi's assumptions about earnings growth, "fair" value, and inflation expectations. But the intent here is show how one real-time money manager is making real-time decisions, not to debate the merits of them.