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

To: James Clarke who wrote (524)	10/28/1998 12:03:00 AM
From: Shane M	Respond to of 4691

ii) the market is so far overvalued that a 20% drop was just the beginning. In recent days I've been getting the feeling that its safe to go back into the water. This, I've learned, is a good indication that the market is beginning to stall. Like yourself, I am waiting to buy at lower prices. I don't like holding cash. Shane

To: James Clarke who wrote (524)	10/28/1998 11:09:00 PM
From: Harry Landsiedel	Respond to of 4691

James Clarke. Re: " Never in history has one of those opportunities occurred when market valuation multiples were so high." I tend to agree with you. Most of the great companies still have P/E's that are about twice their growth rate, which is how I do a preliminary screen of stocks. But at the same time I believe that high multiples are related to bond yields. And when I remind myself that the P/E of the long bond yielding 5% is 20, and never in recent history has the yield been that low, I'm not so sure valuations are "too high". Finally, when I reflect on the lessons of investment history, I'm reminded about Buffett's comment that if history were the main guide to investment success, the richest people around would be the librarians. :) HL

To: James Clarke who wrote (524)	10/29/1998 10:18:00 AM
From: jhg_in_kc	Read Replies (1) \| Respond to of 4691

TO ALL: Good discussion of intrinsic value vs. market value on the Dell thread at posts # 75106 and 75417. Food for thought. Is the market wrong or the model wrong? jhg

To: James Clarke who wrote (524)	10/30/1998 4:01:00 PM
From: jhg_in_kc	Read Replies (4) \| Respond to of 4691

The bear market of the 1970s ended and this great 1980s bull market began on Aug 18 1982, with the Fed preparing to lower interest rates, from 14% to 10 3/8% on the long bond by year end. The bear market of the 1998 began in the spring of this year, appeared in the indices in July and ended at 12.30 p.m. EST on October 8, 1998. That day the WSJ reported emergency phone calls went out from the Fed to money centers and brokerages. The Fed has now cut rates twice. The bull market of 1998 to 2000 and beyond has begun. Only global depression will stop it and banks and governments worldwide are making it clear they will do everything they can to not allow this to happen. Stocks are up 20% since Oct 8; Buffett tried to buy LTCM at a nickel on the dollar. October is over without a crash. In my view those midday calls from the Fed on the 8th prevented it from happening that day. All is well. We will, wiser men and more nervous to be sure, nonetheless press on with courage to Dow 12000 in 2000. I sound the All Clear. all the best jhg