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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (5499)	8/31/1998 7:12:00 PM
From: JZGalt	Read Replies (2) \| Respond to of 18928

Tom, I suspect we will get some sort of bottom put in near term (next 2 months) and we might even get back to some sort of low risk profile, but from there it will still be problematic. You spoke of the p/e contraction because of the price drop, but you've been at this game long enough to know there will be less of a premium given to stocks which do have earnings. Confidence is a critical factor in sustaining markets in tough times and I still blame Clinton for that lame apology for the rather sharp change in psychology. Russia would not have been a really big deal if the perception was there was someone in charge that had a plan. The flip side of the contraction of the "p" is if we do see this worldwide slowdown that is going to happen unless Japan and the US makes steps to put the world economies back on a growth path, then you could see yr/yr contraction in earnings. That will further shrink the p/e numbers. The third thing could happen is the accounting gimicks that companies have used to "beat the estimates" might go out the window. If you can't make the estimates, why try and then you could see some massive writedowns over the next few years. I own good solid stocks and am willing to hold for the 2-3+ years that it might take to work this mess out, but I'm not looking forward to it. This would be great news if I was sitting on that 54% suggested cash hoard that you mentioned over the summer, but from reading this thread, I think that my "tapped out" position isn't that uncommon. Does anyone know if margin calls are issued during the day, or are they accumulated and issued the next day? BTW, I didn't know this thread was that influential. I publish a message at 2:33PM with the market down 130 points suggesting it could get much worse and the market promptly tanks to -500 points for the day. This accounts for some of the change in attitude between these posts. ---- Dave [master of 20/20 hindsight]