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> I recommend studying the 1873 - 1896 period in US stock market and
economic history for a clue as to
what we may expect.
http://www.sharelynx.net/Charts/USDJIND1800-1900.gif
Agreed, but note the market made several new highs over that period.
The 1966-1982 bear may also have patterns in common with the current
bear, even if the fundementals differ. In fact, the DJI pattern from
1966-1974 is very similar to the 2000-2002 pattern.
Another factor in favor of a sideways bear is the high proportion of
extreme bulls and bears; a churning market would hurt them both.
--- In realtraders@xxxxxxxxxxxxxxx, "Norman Winski" <nwinski@xxxx>
wrote:
> JC,
>
> Thanks for the recognition. However, I must differ with you on
your
> evaluaton of the
> current vs. historical US stock market PE ratio. Until the
previous mania
> began in the 1980s, most major bull markets topped with the PE
between
> 18-22. It is my understanding that the S&P 500 currently is at a
PE near
> 30.Most major bear markets have ended with the PE in single digits.
> Obviously, for the US stock market to follow it previous 200 year
pattern,
> earnings would have to
> dramatically improve by at least 100% or the market would have to
drop 50%
> to consider this market
> anywhere near its historical mean of fair value. I recommend
studying the
> 1873 - 1896 period in US stock market and economic history for a
clue as to
> what we may expect. This period was a 23 year period of a gradual
bear
> market with many intervening boomlets. One of the hightlights of
this
> period was the tremendous volatility and bankrupticies of the
rails. One
> can probably translate the
> rails of 1873 - 1896 to the current day internet,
telecommunications, and
> perhaps the airline industries, which have all fell victim to
deflationary
> factors within their industry, just as what happened to the rails
during the
> 1873 - 1896 period.
>
> Longer term, one should keep in mind it usually takes decades for
a bubble
> to unravel. Gold topped in 1869 and bottomed in 1932. Soybeans
topped in
> 1973 and may have bottomed in 1999. Gold topped again in 1980 and
may have
> bottomed in 2002. DJIA topped in 1929, bottomed in 1932 (the
exception due
> to severe price crash) but didn't recover to 1929 prices for 25
years.
>
> Regards,
>
> Norman
>
> ----- Original Message -----
> From: "John Cappello" <jvc689@xxxx>
> To: "Steve Walker" <steve@xxxx>; <realtraders@xxxxxxxxxxxxxxx>
> Sent: Sunday, January 12, 2003 3:12 PM
> Subject: [RT] Commodities
>
>
> >
> > Norman has a great camp...and hit the ball a mile with his sugar,
> > coffee and other picks. I just get concerned when the major rags
> > start to see that light...contrarian that I can be.
> >
> > At the same time there are data that indicate the average market
rise
> > of the third term of a Presidency is around + 20%...and the PE of
the
> > S&P 500 is not super low, but it is nowhere near its peak.
> >
> > John
> >
> >
> >
> > ------------------ Reply Separator --------------------
> > Originally From: "Steve Walker" <steve@xxxx>
> > Subject: [RT] Commodities
> > Date: 01/12/2003 01:51pm
> >
> >
> > More are joining Norman's camp. In this week's Barron's, Marc
Faber
> > and
> > Art Samberg say the new leadership is commodities and hard
assets. I
> > heard it first from Norman over a year ago.
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
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> >
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> >
> >
> >
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