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In '74-'75 the NYSE ran sidebar ads in Time and Newsweek with the
caption "Anybody who would by stocks now must be crazy...like a fox". At
the bottom of the bar was a grinning fox. When the exchanges are begging
for business, we'll have a bottom.
All best,
Charles Marchand
At 10:02 AM 7/13/2002 -0400, you wrote:
>I don't think we can make a bottom until the investing public identifies
>an alternative to the stock market. There is still too much latent
>optimism to stock prices for a real long term bottom to form. What do I
>mean by latent optimism? A good example is the use of long term returns
>in excess of fixed income returns (ie, 'higher' equity-based returns) in
>the assumptions used by corporate pension funds. IOW, we don't hit a
>long term bottom until bonds are again seen as safer than stocks.
>
>The growing federal deficit may help bring this to pass, as increasing
>debt raises LT interest rates while hurting corporate earnings.
>
>Another problem in making a bottom in the US is the poor economic
>performance in the rest of the world. For all the excitement caused by
>the return to parity between the euro and the dollar, the reality here
>in Europe is that the economy sucks. The situation here is much worse
>than in the US, with less flexibility to find a solution. The rest of
>the world is providing little help, except maybe South Korea. The kind
>of scenario we need to really bottom in the US is for a dramatic surge
>in confidence in places like Turkey, Russia and China. Otherwise, too
>much foreign money will stay invested here.
>
>JMHO
>DanG
>
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