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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (53628)	7/9/2002 11:18:41 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Laszlo Birinyi rages against TA and then observes... [snip]Unfortunately, once the technical crowd thinks that it has spotted a trend, it can get carried away. As the fall of 1998 approached, a subsequent roundup of chartist projections in Barron's foresaw the Dow tumbling as low as 5000. Well, that didn't happen. By early 1999 the index was climbing nicely. Would that I had a better market-reading system myself. My own statistical analysis, which is based on comparing trading volumes on upticks and downticks, served well in the 1990s but has faltered recently. Market strategists of whatever stripe have had a rough go. The same is true for economists. This year was going to see a deeper recession in the U.S., then a recovery; now, evidently, it is seeing a recovery in the economy but not necessarily in the market. None of this fumbling about means that good stocks aren't available. Stick with those that pay you to own them, in other words, those with good dividend yields. Verizon Communications (nyse: VZ - news - people ) (39, VZ), for example, yields 3.7% and though it is in the beleaguered telecommunications group has held up well until recently. J.P. Morgan Chase (nyse: JPM - news - people ) (33, JPM) has a 4% yield; although the finance business is tough for now, this giant will not go away. If you are going to be speculative, consider a basket of stocks, such as the SPDR Exchange-Traded Fund (98, SPY), which tracks the S&P 500 and has the potential for great surprises on the upside. The market has discounted and is aware of all the bad news. Any surprises, therefore, are likely to be positive; and with cash-laden investors looking to make money, rallies are likely to be significant. That's my prediction--made without any math. forbes.com Laszlo Birinyi Jr. is president of Birinyi Associates, a financial-consulting firm in Westport, Connecticut. Visit his home page at www.forbes.com/birinyi.