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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (3893)	1/6/1999 10:40:00 PM
From: John Dally	Respond to of 5676

I think I already had my moment of luck. Despite all the brains at work on these threads, investing seems more and more like gambling. I too would guess that we've got at least a few more up weeks before our next swoon. OK Grasshopper, now that you know all wisdom, go out and make your millions!-g- Best regards, John.

To: MythMan who wrote (3893)	2/11/1999 7:14:00 PM
From: John Dally	Read Replies (2) \| Respond to of 5676

OK, MythMan, since you asked . . . In my IRA, sold VRTS on Monday, bought BEARX today. (BEARX is how I go short in my IRA.) (I'm sure you still remember when I switched from short to long last October 7 in my IRA: #reply-5939657 ) In my regular account, trying to avoid capital gains taxes, I sold only enough long positions to be off margin and to buy lots of puts on semiconductor companies. If we get a real BK, the gains on the puts should exceed the losses on the remaining long positions. (Dear Lord, YES! I am willing to pay taxes on VERY LARGE SHORT-TERM WINDFALL PUTZ PROFITZ!!!-g-) (In addition, I am praying that the Lord attended the "Austrian School of Economics" with The Twins, Mike and Will, because then, I know that he will be extremely merciful on PUTZ holders! Yeah, who needs a FLOOD when you can have a CRASH!!-g-) WHY? It seems unlikely that both interest rates AND corporate earnings growth rates will cooperate through 1999 to support the sky-high stock valuations. Here's a look at the 30-year bond yield: tscn.com As for corporate earnings growth, despite the fact that GDP was VERY strong in Q4 last year, growing 5.6%, corporate earnings growth was relatively anemic. For 1999, Merrill Lynch estimates that S&P 500 earnings will grow by only 3.5%, while today the S&P 500 P/E closed at around 33! Here's the article on 1999 estimated earnings growth rates: Dow Jones Newswires NEW YORK -- Merrill Lynch has upgraded its forecast for 1999 U.S. economic growth by 0.75 percentage point in the wake of the "stunning" 5.6% increase in fourth quarter gross domestic product announced last week, the investment bank said Monday. In a research note released Monday, Merrill Lynch chief economist Bruce Steinberg said the bank now expects U.S. GDP "to rise 3-to-3.5% on a calendar year basis and about 3% on a fourth-quarter-to-fourth-quarter basis during 1999." "That is 0.75 percentage point stronger than our prior forecasts, but slower than the 4.2% growth posted in 1998," he said. Accordingly, Merrill Lynch is also raising its "top-down estimate" for S&P 500 companies operating earnings per share to $46.00 for 1999, up 3.5% from 1998, Steinberg said. The bank had previously forecast earnings to decline 5%. Steinberg noted that the "new growth forecast is about one percentage point above consensus expectations, though the consensus will undoubtedly start to rise." Here's the article on the current S&P valuation: Dow Jones Newswires NEW YORK -- The price/earnings ratio of the Standard & Poor's 500 index at the close of trading Thursday, Feb. 11, was 32.92. Wednesday, the ratio was 32.12. A year ago, the ratio was about 25.49. Historically, the lowest price/earnings ratio on the S&P 500 came in the second quarter of 1949, when the reading slipped to 5.9. Over the last decade, the low was 11.7 in the fourth quarter of 1988. The P/E ratio rose to 32.3 in the fourth quarter of 1998, a new high on a quarterly basis, up from 28.7 in the second quarter of 1998. Best regards, John.