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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Wren who wrote (2643)	2/25/1999 7:59:00 PM
From: The Ox	Read Replies (2) \| Respond to of 3339

If we have a major pop, no doubt that the falling tide will lower all boats, as the saying goes. The problem with bubbles is that they can burst at anytime and they can keep expanding past all reason. We can point to the housewives who are now daytraders and say we are near a top. We can see the brokerage TV ads where the truck driver/daytrader owns an island with all the money he's made in the market and say we are near a top. We can see the S+P trading at 30 times earnings while the EPS growth rate this year will be in the 9-11% range and say we are near or at the top. When will it end? Will Y2K cause enough panic to tank the market? Will we get enough negative momentum to cause a crash? If we do, can the FED play enough cards to stem the tide or ease it's impact? I have very little faith that the majority of talking heads will ever say to the public, "let's stop buying MSFT because the P/E is excessive at the current price and wait for the stock to drop 25% before adding". As a group, they will only say something like this after the bubble bursts or MSFT has tanked. ( I only use MSFT as an example, insert your favorite over priced stock ) I think putting together a shopping list of under valued stocks is a terrific strategy. Pick your worst case scenarios, load up on cash and wait for them to come to you or, if you dare, short the bubble. The main issue is how long will you have to wait....or are we in a "new paradigm"??? <vbg>