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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (58788)	7/30/2003 2:19:19 AM
From: Sully-	Read Replies (1) \| Respond to of 65232

Speaking of square rooting the market....... Below I've linked to an extremely interesting article. A must read IMHO. I only linked it because the charts in it are necessary to understand the points they are making. I would say CAVEAT EMPTOR if folks are thinking that there is going to be nothing but blue skies ahead for equity prices..... even if we get a significant upturn in the economy in the 2nd half that runs into next year. The correlations drawn in this article seem to indicate that higher equity prices just may not happen even if corporate earnings expand along with economic growth. And remember, we just pricked a once in a lifetime bubble. History shows that bear markets that follow average bull markets always return valuations to at least historic norms & often lower. Bubbles, or extreme bull markets, are always followed by severe bear markets always return to historically low valuations. Gut wrenchingly low valuations if one is long the market. This bubble skipped on the upper stratosphere at best as far as valuations go. Is it going to be different this time? <font size=4> Rising Earnings Do Not Always Drive the Market Higher by Jes Black forexnews.com