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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ally who wrote (290)	3/28/1998 10:37:00 PM
From: jjs_ynot	Respond to of 2578

>>> It is unlikely to end, unless a significant dislocation happens in the economy... something big, something unexpected... don't know what. Well one thing that might stop the lemming rush to buy stocks is the thing that has often done that in the past, INTEREST RATES. As the economy is straining at the seams and ASIA appears to have endured the worst for a while; inflation and thus interest rates seem to be perking up. This market for the last 15 years has been buoyed by P/E expansion from 7 to 21 and earnings growth also of about a factor of 3. As interest rates go Earnings are harder to come by due to higher fixed interest expenses and P/E also contracts to match the bond yield. Note that recently Fed Funds have been trading about 6 percent the last time that I looked vs. "official" 5.5 percent rate. That is about the only thing that I see in the future to derail the market. However, derailing and stumbling for a 5 to 10 percent correction are different. a 5 to 10 percent correction is healthy and needed before we can approach much higher levels IMO. Thus, I'm seeing more and more signs of this real possibility. We are already down some last week but need another 3 or 4 percent down (about 40 points on SP 500) to make for a meaningful correction. I think that there is a 50/50 chance that we may see that level of downturn. Dave