To: FrozenZ who wrote (29484 ) 4/12/1999 4:26:00 PM From: J.Y. Wang Respond to of 122087
Impossible. If for no other reason than this: For the bull market to continue forever it would mean that people will continuously underestimate earnings and earnings growth. I think a great individual example is Dell. Dell is a tremendous company and probably has the best management and execution in the world. Every quarter, Dell would smash earnings expectations and Dell's stock price would skyrocket after earnings. So the analysts raised earnings expectations and raised them and raised them. Last quarter, Dell barely met the earnings expectations and no more skyrocketing stock price. The stock market right now is in a more precarious position than Dell was/is. Earnings for the S&P have not been growing significantly for the past couple of years (and have remained about the same if it were not for massive "one time charges" which are not taken out of earnings). The S&P has gone up around 25-30% each fo the past two years with no real growth in earnings? If you take out something like 20 companies from the S&P 500, the S&P 500 was down last year (negative breadth). The same with the Nasdaq -- take out the big five (MSFT, CSCO, INTC, DELL, WCOM) and the rest would have sucked. What has to happen for the ponzi scheme to collapse? Another Brazil crisis, Russia to get involved militarily in Kosovo, Balkan crisis to spread to Albania, Macedonia or other countries, China to take Taiwan, civil unrest in China from all the layoffs, Greenspan to wake up on the wrong side of bed, etc. I used to be a real stock market bull but this market is just getting out of control. My friend is an econ PhD student at umich and she says pretty much all the economists think the market is way over-valued. It will come.