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To: Lucretius who wrote (301521)	2/7/2005 6:31:44 AM
From: j-at-home	Read Replies (4) \| Respond to of 436258

Granville sees doom for Dow - [not enuff Fizz in his diet?] BY TOM VAN RIPER DAILY NEWS WRITER Saturday, February 5th, 2005 John Granville is more worried now than at any time in the nearly 50 years he's been following stocks. The 81-year-old prognosticator and author of his own Granville Market Letter can barely disguise his disdain at the happy bulls who are shrugging off January's mini-slump and insisting the markets are swimming along just fine. "We're sitting on the most dangerous highs in years," Granville told the Daily News, pointing to the latest cycle that's pushed the Dow up 40% since March 2003. By his reckoning, the current lofty levels mean the timing is right for a big fall. He believes the Dow's 260 point drop since Dec. 28 is the the tip of the iceberg in what will be a long and painful slump. He sees the blue-chip index dropping to 7,400 before the end of the year, just below its March 2003 level. The Nasdaq will fare even worse, dropping over 50% to under 1,000, he predicted. Granville's game is timing the market by looking at historical price trends - and nothing more. He cares nothing about the latest news from Iraq, the ups and downs of the economy, or the sunny forecasts of many corporate CEOs. And don't even get him started on profits. "Earnings are not a predictor of stocks," Granville said emphatically. "If anything, my charts have always shown that you buy stocks when earnings are down, and sell when they're moving up." "People do the obvious. They turn on the TV and get the latest news and earnings, but I turn my audio down," he said. "I constantly watch what the market is doing, not what the news is doing." To be sure, Granville's market-timing techniques have brought mixed results over the years. He correctly predicted the bear market of 1973-74, and was among the first to warn tech stocks were overheated in 2000, when the Nasdaq passed 5,000. But he completely missed the big bull run of 1982 to 1986, a stretch that saw the Dow more than double. Still, he's proud of the system he's stuck with for nearly a half century. It skips what he sees as trendy stock picking habits based on good stories - think of all the dot.coms of the late 1990s - and an obsession with quarterly profits. "People don't realize that most who think we're headed higher are the same people who missed [the decline in] January," he said. "I am the exact opposite of Wall Street." nydailynews.com