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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (21307)	5/16/2005 12:56:03 AM
From: Carl Worth	Read Replies (1) \| Respond to of 78666

as dale often says, generalized "market" comments are usually just someone's guesses or biases...this reply you elicited from this poster is an even further generalized comment, i.e. useless what matters is what you own, and how it is doing and will do longer term IMHO it's much more productive to focus on that, rather than some SI poster who just posts doom and gloom...it's the same as someone who is continually bullish, but has no track record or specific advice over the past few years, the two main lessons i have learned are to avoid focusing too closely on the "market" itself, and to go against the crowd...i.e., buy when everyone is scared and selling, and sell when everyone else is euphoric...also interesting that the more i read of the thoughts and practices of the best stock market participants over the years, the more i find this among their best ideas as well no need to reinvent the wheel, or ask someone who has never built a wheel to explain to you how to do it <g>

To: Dave who wrote (21307)	5/16/2005 9:48:56 AM
From: Rarebird	Respond to of 78666

<Interest rates are still pretty low.> The Fed has raised the Fed Funds Rate to 3%. But the vast US bond market is not responding to this treatment. Short-term market interest rates have gone up somewhat, but the long end has not, and that is a HUGE economic signal. It signals that the US bond market sees the current US economic situation as being close to a real economic recession. The S@P is trading at 20 times trailing net earnings. That pretty much represents a record. Moreover, if you analyze multiples like price/revenues, price/book or price/dividends, you'll discover that current multiples are much higher than their respective historical averages. Sure, there are a small percentage of equities that are trading at decent valuations. In a real secular bear market, only 10%-15% of stocks will rise and NO asset class will outperform cash. Don't let your typical run of the mill money manager or huckster tell you otherwise. The average Joe should either have his money in cash or with an extremely astute bear market conscious money manager. The few money managers I respect are currently either in huge cash positions (50%) or are hedged their long equity positions by shorting the indices.