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To: Terry Whitman who wrote (150594)	2/11/2002 11:06:31 AM
From: John Madarasz	Read Replies (1) \| Respond to of 436258

How long is this current bull cycle you are tracking? I've seen commentary that postulates the buy and hold strategy in the SPX has actually been dead for the past 5 years.. ala Alan Newman from Crosscurrents.net. Regards, and TIA, John M

To: Terry Whitman who wrote (150594)	2/11/2002 11:07:09 AM
From: clochard	Read Replies (2) \| Respond to of 436258

I'll bet you we tank big time today.

To: Terry Whitman who wrote (150594)	2/11/2002 11:58:42 AM
From: reaper	Read Replies (2) \| Respond to of 436258

<<That's what the bears hope for>> I don't know about other participants on this thread, but I don't "hope" for much of anything. I buy cash flows that on a risk-adjusted basis give me a return greater than my STRIPS, and I short accounting games and companies that invest capital at a rate of return that is less than their cost of capital. I don't need hope (at least not for my capital; all my "hoping" is directed toward my beloved Red Sox). Buy and hold has actually been dead for a VERY long time. If you do the math, you will find that for an investor that dollar-cost averages equal $ amounts each year (which describes most investors), the guy who put $10k every 31 December in 10-year STRIPS is only $3k behind the guy who put $10k every 31 December in the S&P 500 going all the way back to 1993. And since most funds charge 100 bps of assets in management fees each year, and the management fees on a portfolio of STRIPS is zero, the STRIPS are ahead. [note -- this applies to non-taxable accounts] Terry, have you had a chance to peruse Hewlett-Packard's 10K, which was filed a couple of weeks ago? I don't mean to bore you with the minutiae of accounting (I mean, how could accounting ever live up to the power of hope) but if you were to check out Note 15 on page 73 you would find that HP's pension plan, which has been in surplus for as long as I can remember, is now in a deficit. A $769mm, or 24%, deficit, to be precise. HP actually LOST $422mm in its pension plans in FY01. Again, not to bore you with silly, irrelevant things like government regulations, but if you were to read the provisions of ERISA you would discover that companies with plans funded under 80% must contribute cash to bring the plan up to 90% funded within 3 years. IF the market were to go net nowhere over the next three years (of course, HP 'hopes' that it will go up) then HP will have to come up with a mere $600mm to re-fund its plan. I bring up this little example because you should expect to see a LOT more of this as 10Ks for the December year-end are filed by a lot of "blue-chip" American corporations. Anyway, I was wondering, in calculating your earnings estimates for the market (which earnings you expect to be higher, I presume, over the next few years) what assumptions you were using for (i) the total pension obligations of the S&P 500; (ii) the total pension assets of the S&P 500; (iii) return assumptions; (iv) how much of CY99-CY01 income came from pension gains. Feel free to PM me your assumptions on these matters if you don't want to make your proprietary earnings model known to the rest of the thread. Anyway, as I said, I don't need hope (but the Red Sox sure do <g>) Cheers

To: Terry Whitman who wrote (150594)	2/11/2002 12:15:07 PM
From: Tommaso	Respond to of 436258

P/Es have done pretty well for me, especially when I was buying puts on AMZN, YHOO, and so on a couple of years ago. People said P/Es didn't matter for Japanese stocks ten years ago. People said P/Es didn't matter in 1929. People said P/Es didn't matter in 1972. And people are saying they don't matter now.