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

To: SOROS who wrote (8331)	10/24/2002 12:27:35 AM
From: stockman_scott	Respond to of 89467

Sig's comments on 'the bear market'...fyi... Message 18150342 regards, -S2 btw, when will Jim Woolly be stopping by this porch...?

To: SOROS who wrote (8331)	10/24/2002 12:32:21 AM
From: stockman_scott	Respond to of 89467

Dive Right in, Siegel Says, the P-Es Are Fine BusinessWeek.com NEWS: ANALYSIS & COMMENTARY OCTOBER 28, 2002 Thanks to the stock market's big bounce around Columbus Day, being Jeremy J. Siegel just got a lot easier. The Wharton School finance professor is the high priest of investing in equities, thanks in no small part to his 1994 bestseller Stocks for the Long Run, now in its third edition. Siegel is just as bullish now as he ever was, insisting that investors can confidently expect to make an average of 5% a year after inflation over the next 20 to 30 years. The main reason? Today's buyers are getting in at prices more than 40% lower than in March, 2000. That matters because the five big market busts of 40% or more over the last century were followed by above-average annual real returns of 8.6% over the next five years. "You're starting from a much lower base," says Siegel. "I don't consider this market to be dirt-cheap, but it is a good, if not better-than-average, time to buy equities." How so? First, as of Oct. 15, stocks were about 20% lower than they would have been had they simply matched the average 6.7% annual returns since 1801. This is the first time the market has been significantly below that trend since the end of 1994. By contrast, at the end of 1999, the market was 70% overvalued. Furthermore, argues Siegel, stocks now deserve a price-earnings ratio in the low 20s--vs. an historical average of around 15--because inflation, taxes on capital gains, and stock trading costs are all significantly lower than they typically have been. Current low yields on Treasury bonds are making the call for stocks easier as well. T-bonds have just completed their best 20-year run in a century, running up compounded annual returns of 8.5%, after inflation, from 1981 to 2002. But the recent 4% nominal yield on taxable 10-year Treasuries now makes them "the world's worst investment," says Siegel. Inflation will likely eat up more than half the yield, he says. Of course, plenty could go wrong with Siegel's rosy scenario. For one, what he calls "irrational despondency" could break out: That's when investors dump stocks again and again for fear of new losses. Indeed, Robert J. Shiller, author of Irrational Exuberance and a Yale professor specializing in behavioral finance, believes investors will become a lot more pessimistic about stocks. "I wouldn't be surprised if we fell below the average p-e of 15, maybe to 10," says Shiller. "That would halve the market again." Failure to clean up scandal-ridden accounting practices could also prove fatal to solid stock returns. Unless businesses consistently report earnings that can be compared against past performance and peers, stocks won't be worth 20 times earnings, Siegel concedes. Nor will equities do as well as he expects if terrorists attack again in the U.S. Says Siegel: "If what happened in Bali happens in the U.S., then the bets are off." Despite those considerable risks, he doesn't think stocks will go as low as they did in 1982, when p-e ratios of less than 10 heralded the start of an 18-year bull market. "As much as everyone is discouraged about stocks, I don't think investors are going to let the market get as cheap as it has in the past," says Siegel. That's why he foresees real gains of 5% a year in the future--a lot better than recent performance, but still nearly two percentage points less than the average real returns over two centuries. In other words, because future stock buyers won't get shares at prices as cheap as in the past, they won't get returns as rich as in the past, either. Keep in mind that when Siegel says long run, he really means it. Stock investing, he insists, needs to be carried out over a full 20 to 30 years. And that's a time frame that easily outstrips most investors' patience. By David Henry in New York businessweek.com

To: SOROS who wrote (8331)	10/24/2002 11:56:46 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

HEBEDDA HEBEDDA HEBEDDA, THAT'S ALL FOLKS !!! rallymonkey.com more wisdom later, lunchtime, hunger calls this stock market is a DEN OF FOOLS investors now deserve all the pain forthcoming my warnings to 20-25 closer friends have been heeded by 2 acceptance (nay, embracing) of heresy and lies and delusion is widespread illiteracy is the chief weapon among bull sell siders, sadly GOLD's ascendancy is slow but inevitable massive accumulation phase underway the disappointment among recent stock investors will crush their spirits before Christmas the Mother of All Stagflations is soon to emerge, which will totally totally eclipse the late 1970's, not perhaps with its amplitude, BUT CERTAINLY WITH ITS PAINFUL DURATION Hairless Sir Alan GreenScrotum spins more heresy, sounding as though he walks down the identical errant path of George Gilder let him remain bound to his banking, all contrary to constitutional planks, and stay out of stock market counsel and manipulative leadership China will overshadow the USA by the dawn of the next decade, as Asia transitions to gold-centric commerce and banking the pegging of the Chinese currency yuan to the USdollar assures their rise and our fall China's trade surplus is growing at a 20-30% annual rate, which will assure the continued hemorrhage of American capital lifeblood THE MAJORITY OF CHINESE SURPLUSES WILL BE STORED IN GOLD THEY HAVE OPENED THEIR SHANGHAI GOLD EXCHANGE !!! exciting times, rally on some good guys over on IHub keeping me company, stimulating, learned some tricks, with some old SI guys I will be keeping one foot in that smaller but no less adept pond IHub officials gave me a free fullboat membership apparently, the jackass's hind parts attracted numerous flies even got into a good scrape with arrogant Xeev last weekend the poor pedestal dweller lost his cool rallymonkey.com thanks personally to all who visited with free IHub memberships very grateful I will remember you in my will I deserved the suspension, even its extension for posing as the manharlot of Lord John Maynard Keynes, obscured in history as Duncan Grant, an artist it was fun, and totally worth the charade I will resume my attack of Gold_Tutor, only with more intellectual knives tossed her way, in cutting her down to proper size, of course maturely finally, let's keep politics to a minimum on this thread all the Bush hacking and Dem hacking and political squabbling is a direct sign of diminished intellect when all else fails, discuss weather, sports, politics we are above that / jim aka Duncan (oooxxxooo)

To: SOROS who wrote (8331)	10/24/2002 1:26:10 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

Sears is a 2nd Lucent, as was Cisco, but they have eluded the hardship Cisco might have a stronger pipeline of orders, but mainly because most of their competition is dead that is not an indication of restored health to the tech arena, specifically the telecom highway boys most of the fiberoptic component stocks are sub-$1 now I believe Cisco financed to at least 100 DotComs, many of whom are bust now just shows how regardless of your line of business, mgmt can turn you into either a casino or a lending business in five easy steps, five quick years so many observers (cheerleaders) view our financial creativity as a strength, with innovative financing that confuses even intelligent people, so adaptive, so efficient I dont share this confidence I instead view our financial lending creativity as a thousand sticks of dynamite in every business, in every home our debt entanglements are like nooses that will find necks!!! the effectiveness of such diverse lending practices has as its basis in profitability an expanding economy with hiccups at worst until now, the end of the supercycle Sears lending had 14% of revenue, 50% of profit their Discover creditcards are losers what is happening here with Sears is a preview of what will happen to Fanny Mae, along with a wagon train of lenders, starting with mortgage and extending to cars and installments lending without much attention to being creditworthy is a keg of dynamite with a long fuse in today's environment this vulnerability is deadly / jim