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.

Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (5733)	2/26/2003 10:35:44 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 25522

Not quite. I can't remember where I saw the study, it may have been The Economist, it analyzed both confidence numbers and the conclusion was that only the "future" component of surveys were leading indicators. I suppose the extreme lows of "present" components could be a contrary indicator. ST

To: Kirk © who wrote (5733)	2/26/2003 2:01:16 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 25522

<consumers will say one thing in a survey but still go out and shop/buy> True, for two reasons: 1. inertia. Expectations have to stay down for a while, before it changes behavior. Just like stocks have to stay down for 2-3 years, before an UnWealth Effect is seen. 2. if interest rates are low enough, and credit is easy enough, it may overwhelm a fall in confidence. IMO, that's what we're seeing today. Which means, "look out below!", if we see an uptick in inflation, while consumer confidence stays at current trough levels. Another interesting correlation (sorry, no chart), is the close LT relationship between the inflation rate, and the stock market's E/P (inverse of PE). If I start to believe we're seeing an uptick in inflation (and hence, mortgage rates), I will close all long stock positions, and not even think about going long until Nas <<1000.