Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (3396)	7/29/2002 10:36:54 PM
From: stockman_scott	Respond to of 89467

Death-Defying Rally May Not Mark Bottom thestreet.com <<...As for those wondering why I believe the bear will re-emerge with greater ferocity, consider the following, from Bernie Schaeffer of Schaeffer's Research in Cincinnati, who recently identified four major reasons why he hesitates to call this the bottom: -Market valuations are "in the stratosphere relative to what we normally see at major market bottoms, and this fact is being ignored by the vast majority." (Separately, Merrill Lynch strategist Richard Bernstein -- who like Schaeffer has been bearish for some time now -- suggested Monday the "variability/unpredictability" of earnings is most important and that "the equity market does not appear overwhelmingly undervalued" despite its recent decline.) -The dollar remains vulnerable to a "major additional decline," which could "crater the U.S. stock market even further while at the same time putting pressure on the Fed to hike rates," Schaffer observed. (Many skeptics believe the dollar/equities and gold are merely experiencing countertrend moves within larger trends that remain intact.) -A "crushing debt burden" on consumers and corporations in the wake of the stock market bubble and a potential housing market bubble. (As of March 31, total U.S. indebtedness was 287% of GDP, according to the Fed.) -Lack of capitulation by individuals, the popular conception to the contrary notwithstanding. The Investment Company Institute Monday reported equity funds had outflows of $18.05 billion in June (with domestic funds losing $18.7 billion), the third-largest ever in dollar terms and the top two -- September and March 2001 coincided with important tradeable bottoms. However, that outflow represented only 0.54% of the previous month's assets in equity funds, ICI noted. More than $3.4 trillion remained in equity mutual funds at the end of June vs. under $2.4 trillion at the end of 1997 (which I use because major averages were back to 1997 levels last week.) Outflows are "a small fraction of what they could be in a serious panic," Schaeffer suggested, noting opinion polls continue to show a high degree of faith in the market among retail investors. "This complacency does not preclude a major rally from here, just as a major rally off the September 2001 bottom was not precluded despite the widespread complacency that existed at that time," he continued. "But the 'all clear' signal for jumping back full bore into this market has not sounded, and the possibility of major additional damage before the ultimate bottom is far from remote."...>>