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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: uu who wrote (25262)	10/1/2002 6:32:19 PM
From: sea_biscuit	Respond to of 25814

Sure. Take a look at this (from an article on SI): Even a broad-based index like the Total Stock Market Index is trading at 3 to 5 times its normal valuation level. Even if it maintains this valuation level, you are only going to get dividends plus real growth which amounts to less than the return on Treasury Inflation Protected Securities (TIPS). Bonds can't go much lower, so your return will be yield less capital depreciation. Inflation can't go much lower unless we go into deflation, which means Depression/Japan. Plus, we have a host of headwinds facing us: 01) Excessive valuations by all measures 02) Low dividend payout ratios 03) Excessive leverage among consumers, corporations and government 04) Unsustainable and growing current account deficit 05) Inflation showing up in oil, gold, TIPS, housing and equities 06) Non-existent savings rate 07) Goodwill write-downs 08) Phantom earnings allowed by option accounting 09) Overly optimistic pension return assumptions 10) A return to realistic accounting and analysis 11) Increased global uncertainty 12) Excess capacity 13) Unrealistic investor return expectations 14) Impending increase in unsustainable short rates 15) An inflated dollar 16) Increased non-productive "friction" introduced throughout the economy due to the War on Terrorism 17) An ongoing failure to prepare for all the impacts of the aging baby boom generation 18) The service economy following the manufacturing economy to lower-priced, overseas labor 19) The loss of investor faith in all participants in corporate governance 20) CNBC These headwinds concern me. I'm sure they will be worked out in time, but I don't anticipate a painless process. And I don't expect a steady progression where investors are satisfied with no real return over the next 20 years. (i.e. there's got to be a major, major, MAJOR bottom in the market sometime soon, maybe within the next couple of years).