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Dear Bob,
I agree.
No question in my mind that we are in uncharted waters.
At the same time where were those same investors as the market went
sideways to down over the last 10 months?
There are some exciting special situations still in the market but I do
not see them in the overall S&P 500 just to use as a barometer of an index
that has had somewhat of a breakout.
Current PE reported at 30.5
Price to sales reported at 1.65
Dividend yield reported at 1.5%
Price to book value reported at 2.85
Even with expected growth of 21% in earnings we are in problematic
historical zones.
Source of info: http://www.stockselector.com/sp500.asp
In March 2003, I jumped in with both feet. At this time I am cautious and
hopeful that you are right.
Sincerely,
John
>
> At 03:34 PM 11/8/2004 -0500, you wrote:
>
>
>>If I look at a chart of the S&P, I see a downward slanting
>>channeling pattern from MARCH until now with a breakout above the upper
>> trendline. Same is true for the Dow and the DIA and DJI.
>>
>>
>>It had appeared to me to be in a sideways channeling trend with lower
>> lows and lower highs which was short term bearish overall. However, in
the past several days we have a price breakout but on slowing volume which
I now see as a bearish short term tendency.
>>
>>Additionally, my highly defensive portfolio was hitting new highs even
>> as I increased cash...which I found unusual.
>>
>>My point is that I believe there will be a rally suspension with a dip
>> and then a ride higher. This is a strange market to me.
>>
>>Sincerely,
>>
>>John
>
> Just remember the options the investing public has at its disposal.
Very, very, few folks will short stocks. Bonds are still paying
inflation break even returns. Less than 1% of Americans invest in
futures and mutual funds are rarely allowed to short by their own rules
and investors in those funds aren't going to sit on cash long before they
look for a new fund. Common sense dictates that money flow into the only
source that *might* provide these people with a good return and there is
a huge percentage of Americans reaching retirement age now who are
desperate to find a place where they can enhance their holdings enough to
retire. (Read "Baby Boomers"). No historical chart can match these
conditions and we are therefore, in "uncharted waters".
>
> Bob
>
>
>
>
>
> Yahoo! Groups Links
>
>
>
>
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