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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: The Freep who wrote (27801)	1/13/2002 9:52:53 PM
From: NOW	Respond to of 209892

"If the market were to rally to the top end of my range -- up 20% on a knee-jerk, oh-it-is-all-over, whoopee! -- reaction, the best that would happen to earnings is they'd be flat to slightly off. [He hit the S&P at 20% on the nose! - JM] The market would approach its old high with a substantially higher P/E, because earnings would still be down more than 20%. So instead of 33 times earnings, you'd see the S&P priced in the high 30s or 40 times earnings. The economic recovery will be quite short, two or three quarters, and weak. And then people will get a whiff of the fact that GNP is going to settle back down into a 1.5% range again, because of the capital-spending bust. Finally the negative savings rate will begin to move up, and that will impact top-line growth. The market is no longer in its old game. But this will not destroy the economy. I am not a big bear on the economy at all." Grantham, august 29 2001