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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: jtech who wrote (18927)	9/18/2002 8:48:27 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

jtech re: S&P PE Ratio's... to revist an old subject - If expensing options trims 20% of the S&P earnings; throw in another 5-10% minimum for creative/aggressive accounting... and then debate on whether we want to use "trailing earnings" - in an environment of declining actual earnings, misses and continued lower guidance; or do we use forward earnings "estimates" - when those estimates are being continually guided lower ? Setting aside historic PE valuation multiples...at the minimum imho; it's prudent to place 2 Risk Discounts on whatever S&P PE Ratio you want to use - when viewing whether value lies here at present levels; on any historic, time tested basis... #1 - Quality of Earnings & Accounting discounts (encompassing the haircut for expensing options, along with creative & aggressive accounting in general). #2. - Rogue Wave "EVENT" Risk - for which the geopolitical & economic landscape is presently a literal minefield of near historic high levels of risk. ...then there's the historically paltry dividends... which over time will become a new market mantra.... ie: DIVIDENDS will reign supreme once again imho...then there is the DEBT levels of Corporate America... Cash, Patience (waiting for historic opportunity - ie: EVENT driven/Rogue Wave entry/buying opps) and a strongly defensive weighted portfolio position in gold/silver, Cash, TIPS and perhaps an intitial toe dip/average in - into truly deep value plays is the only play I see here... with perhaps a near LEAPish premium being assigned to "longterm PATIENCE" - which will be the most profitable trading trait for some time to come ...imho. Imho; if you don't have 50% CASH here... you will ultimately miss the chance to "lever" a historic opportunity... and you shouldn't be sleeping well (vbg). It amazes me that the average Institutional/Mutual Fund Manager has only 2-3, maybe 5% Cash here....there is no one to buy at the margin any longer... and as commented on elsewhere in the media... "sellers, truly do control this market - in this environment"... Did everyone see the Fannie Mae/Freddie Mac - numbers on deliquencies... Bankrupticies are soaring and will do so dramatically once again - to get in under the new legislation time window... JPM going from .52 cents to "0 cents"... CITI's deliquent loans may increase 30% over the coming months according to one pundit in today's news... and all we need is one, just one - Rogue Wave Event... to trigger a Derivitatives Crisis/Meltdown... and it seems that this too - shall be a "when, not if" event in the opine of many...and our Fav' Gold-Cabal member JPM is holding the biggest bag of all (vbg). I think we'll get to see - "TOO BIG TO FAIL & TOO BIG TO BAIL".... "tested" before we see the "bottom" in this market...JPM looking more & more like the Derivatives "IDOL" every day... Gold (FOI EST TOUT~) hasn't sang it's encore yet... The Fed has massive challenges ahead... we'd better make Iraq a "quickie" because the last thing this economy needs is $40-$60 Oil for any prolonged period of time... what will that do to Trucking & Airlines, Tourism etc... not to mention what $2-$3 gasoline will do to the US Consumer... It's still UGH-LY out there... PS: re: this chart of the Nikkei finance.yahoo.com^N225&d=c&k=c1&a=v&p=s&t=my&l=on&z=m&q=l - someone tell me why the Nikkei doesn't have another 30% downleg left to retrace the head & shoulders top to approx 6849 ? Or, how about DAX 2000... yet another 30% down ? re: finance.yahoo.com^GDAXI&d=c&t=my&l=on&z=b&q=l ...I still think it's 50:50 that wee see the DOW 5000's and a S&P sub 500...tell me that all of these charts aren't saying the same thing ? finance.yahoo.com^DJI&d=c&t=my&l=on&z=b&q=l finance.yahoo.com^GSPC&d=c&k=c1&a=v&p=s&t=my&l=on&z=m&q=l Those levels are where the US Investor will "emotionally" repudiate stocks... after "physically" giving up a decade of gains derived from an environment of speculative excess... and that's what history has told us - is going to happen, has happened post nearly ALL prior speculative bubbles and will continue to happen in most, if not all future market cycles -post a speculative bubble replete with massive, if not historic amounts of misallocated capital & and a cooresponding DEBT orgy & collapse. Emotions follow the numbers and to a degree... vice versa. MeThinks we are only in about the 4th, or 5th inning of this BEAR Market fwiw... History is telling us we've got another 30-40% downleg... and sadly; this historically is the most painfull and damaging 30-40% in the cycle... and another generation will learn what "true" capitulation is... and maybe we will see the ole' VIX pegged into triple digits once again... I think we will. Ciao~