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Earl-
Pardon my ignorance but is the Precter quote in its correct context? To
reask; the language and conclusiveness sounds contradictory; but its
probably
my lack of understanding. Thank you.
chas
====
----- Original Message -----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: <MedianLine@xxxxxxxxxxxxxxx>; Clyde Lee <clydelee@xxxxxxxxxx>
Cc: Realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>; Swingmachine
<swingmachine@xxxxxxxxxxxxxxx>
Sent: Saturday, July 20, 2002 9:23 AM
Subject: [RT] Re: [SM] Re: [MedianLine] Log Chart:Quarterly SP500
> I believe that quarterly from 1974 is much too short a period for a super
> cycle bear market. Attached log-scale SP500 chart displays channels
forward
> from the 1929 highs. While one would make a different set of assumptions
> looking forward from 1974, this chart shows that it is reasonably probable
> that: price will return to the yellow mid-channel line (currently 750+-)
> rather soon and that price will eventually reach the thin blue line
> (currently 350+- but more likely 400-500 in price/time).
>
> In the olden days there was a guideline which said one never pays a PE
> higher than the rate of earnings growth ... this is referred to as the PEG
> (Price Earnings Growth) ratio. This rule worked very well until the
mid-90's
> when analysts and investors threw valuation measures out the window. I
think
> INTC is a great example of where we are ... a cyclical industrial
technology
> company which has long been held in high favor. If you go
> http://biz.yahoo.com/z/a/i/intc.html and scroll down to the bottom row of
> the Earnings Growth section, you will find a PEG of 1.9. If you divide the
> closing price of 18.69 by 1.9 you find you would need a price of $9.82 to
> achieve a PEG of 1.0. Since the rule says one should not pay _more_ than
> this, $9.82 would be fully valued ... not a bargain price. Now try a few
> others: MSFT = 1.85, GE = 1.20, MRK = 1.35, WMT = 1.64, and XOM = 2.42 ...
> you can do the math on what kind of price haircut will bring the PEG to
1.0.
> Of course this assumes that earnings do not continue to decline in coming
> quarters ... analysts typically overestimate earnings until a bear market
is
> over. Finally, just as bull markets wildly overshoot on the upside, bear
> markets wildly overshoot on the downside. In short, the most ardent
> technician (and I include myself here) needs to keep one eye on a few
> fundamentals to put things in perspective.
>
> To summarize, traders should have a field day over the next several years
> but it is far too early to be looking for a bear market bottom. One
sentence
> from a Kate Welling interview with Bob Prechter holds a place of honor in
my
> investment management notes: "When the P/E ratio falls to a lower low
> despite the fact that stock prices bottom at a higher low than the
previous
> low, it is a signal that a long term uptrend is in place".
>
> Earl
>
> ----- Original Message -----
> From: "Clyde Lee" <clydelee@xxxxxxxxxx>
> To: <MedianLine@xxxxxxxxxxxxxxx>
> Cc: "Realtraders@xxxxxxxxxxxxxxx" <realtraders@xxxxxxxxxxxxxxx>;
> "Swingmachine" <swingmachine@xxxxxxxxxxxxxxx>
> Sent: Friday, July 19, 2002 10:23 PM
> Subject: [SM] Re: [MedianLine] Log Chart:Quarterly SP500
>
>
> First, I apologize to those of you who are members of more than one of the
> three lists that I am posting this to.
>
> This post is to try to put some real perspective of this "bear" to all
prior
> bears since (but not including) the 1929 fiasco.
>
> As you will see, we are in a zone where it is really hard to estimate
> whether
> investor confidence will recover enough to turn around very soon or if we
> are to be drug down to some of the further depths to which the market
> has been subjected in prior years.
>
> Later this weekend I will modify the SM program and only record down moves
> that have lasted 4 to 8 months and post them on a chart similar to this so
> we
> can have some more ideas of what may happen very soon.
>
> The interesting thing is that even if we are not at the bottom, two years
> from
> now we can expect to be somewhere in the range of 9,500 to 15,000.
>
> If the latter figure is true (and a bunch of projections point in that
> direction)
> then we could have an increase to 200 % of present value of a portfolio if
> we just bought the DOW stocks.
>
> Kinda scary/amazing is it not ? ? ? ?
> - - - - - - - - - - - - - - - - - - - - - - - - - - - -
> Clyde Lee Chairman/CEO (Home of SwingMachine)
> SYTECH Corporation email: clydelee@xxxxxxxxxxxx
> 7910 Westglen, Suite 105 Office: (713) 783-9540
> Houston, TX 77063 Fax: (713) 783-1092
> Details at: www.theswingmachine.com
> - - - - - - - - - - - - - - - - - - - - - - - - - - - -
>
> ----- Original Message -----
> From: John Wintels
> To: MedianLine@xxxxxxxxxxxxxxx
> Sent: Friday, July 19, 2002 8:58 PM
> Subject: Re: [MedianLine] Log Chart:Quarterly SP500
>
>
> Thank you for finally saying it! Please forward to O'Reilly, Imus,
Peter
> Jennings, The Today Show, Meet The Depressed, and the guy standing on the
> ledge over there . . .
> ----- Original Message -----
> From: Mr. Kevin Bantz
> To: SPX_Swing_Trading@xxxxxxxxxxxxxxx
> Sent: Friday, July 19, 2002 9:24 PM
> Subject: [MedianLine] Log Chart:Quarterly SP500
>
>
> Putting things into perspective, it doesn't look so bad...
>
>
>
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