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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (12641)	5/2/1999 2:44:00 PM
From: Jerry Olson	Respond to of 99985

HI Ramsey well i'll have to take issue with you on several points... J6P???? these people haven't a clue how to buy Internets...it's not them!!! it's the fundies guy??? the FUND MANAGERS...Mutual Funds...the lttile people day trade them, buy and sell them for good profits...these high paid magrs are buying in droves now...this market is for real...albeit a little ahead of itself<gggggggg>... if you read the Investors Bussiness Daily articles I read on Fri..i think you'd have a different feeling about the nets...now AMZN??? don't get stuck on Books & Music...they'll be a hell of a lot more than that..bet on it..I am!!! they've had 2 consective quarters of 250 million in gross sales!!!! a billion dollar company... forget valuations..the entire wall street has...hehehe...

To: Ramsey Su who wrote (12641)	5/2/1999 3:23:00 PM
From: Giordano Bruno	Read Replies (3) \| Respond to of 99985

OT Ramsey, an interesting piece on valuations. May 2, 1999 Is End of Bull Market Run Near? Filed at 2:05 p.m. EDT By The Associated Press NEW YORK (AP) -- Even if the bull market in stocks remains as healthy as ever, analysts worry that many aggressive investors are headed for a painful letdown. It defies reason, they say, to expect the market averages to keep climbing in the future as fast as they have in the recent past, fresh from four consecutive years of 20 percent-plus gains. While the stock-price indexes keep gaining ground, sudden changes in trends within the bull market can still take a heavy toll on ''momentum'' investors who like to own the hottest stocks of the day, or on day traders playing the market through the screens of personal computers. ''I don't mean to imply that the bull market is coming to an end, but investors must lower their expectations for market returns,'' says H. Vernon Winters, chief investment officer at Mellon Private Asset Management. ''Individuals are enraptured with stocks,'' Winters said in a luncheon speech to the Estate Planning Council of New York City last week. After taking a recent look at some establishments where the customers were day-trading stocks, Winters concluded, ''this is going to end very badly.'' ''It's a wild market,'' adds Yale Hirsch, an Old Tappan, N.J., adviser who has published the newsletter Smart Money and the annual Stock Trader's Almanac for more than 25 years. ''A shift by a fraction of a percent of the money at work can send some stocks flying and others plunging.'' Ever since the bull market took off on its latest run, in 1995, analysts and money managers have warned repeatedly that stocks could not keep up the pace they were setting indefinitely. But as the market has chalked up one year after another of powerful gains, their warnings have been drowned out by the roar of the bulls. ''Is it time to adjust expectations for future returns upward? Absolutely not,'' says Gus Sauter, who oversees the hugely popular index funds at the Vanguard Group in Valley Forge, Pa. ''Half of the stock market gains over the past 15 years are due to increases in price-earnings ratios,'' Sauter says in a current report to Vanguard investors. ''So the only way to achieve future gains of the same magnitude is to have further dramatic increases in P-E ratios, or valuation levels. ''Right now, valuations are higher than they have ever been, so it's hard to make a compelling case that we're going to get any substantial increases in valuations from here. ''If current valuation levels remain intact, then future stock market returns can come from only two sources: Earnings growth and dividends. Earnings have typically grown at about 6 percent per year, and the current dividend yield is less than 1.5 percent. ''So a reasonable estimate of returns over the next decade is 8 percent annually, and that's assuming that valuation levels don't decline, which they very well could.'' In his speech, Winters said, ''Stock prices are very high, but conditions are really wonderful. Innovation, mainly in the form of technology, is allowing the U.S. economy to grow much faster than anyone thought possible. We expect continued growth, low inflation, and interest rates remaining low. ''The problem I have is valuation. I love the Internet, but is it really that easy to make money? I think large U.S. growth stocks are perhaps the most overpriced asset in the world at this point.'' Winters concluded, ''We think that the bull market will continue, but it is in a maturing phase.''