Is It Time to Buy? What History Shows 55 comments
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The market can be frustrating. Just a few weeks ago it looked like the markets were about to reach lows we haven’t seen since the early 90’s.
The commodity bubble was bursting, hedge funds were imploding, and it seemed like the selling would never stop. To add fuel to the fire, unemployment was getting worse, consumers started saving again (seemingly all at the same time, which isn’t very helpful), and practically every week another bank failed.
It was disastrous. The government was handing out cash to banks and guaranteeing private companies’ commercial paper while putting trillions of dollars it doesn’t have at risk. It seemed like a depression wasn’t out of the question, but all of that’s starting to change.
Consider what’s happened over the past few weeks. Citigroup (NYSE:C) practically failed. It has become painfully obvious that despite a multi-billion dollar bailout, one of Detroit’s Big Three is going to go away, either through merger or through bankruptcy. Retailers reported the sharpest holiday shopping season declines in decades, and the unemployment rate is climbing faster and faster.
There’s almost no good news, but the market is still up. Sometimes it just doesn’t make any sense. However, it could be telling us something - the recent rally could be a giant signal the worst is behind us.
All the Signs of a Market Bottom
A few weeks ago, we looked at the five telltale signs of a market bottom. At that time, we saw four of the five signs, but were still waiting for one more in order to start seriously considering a market bottom.
The first four signs a bottom was nearing were confirmed. Investors were bailing out of mutual funds at record pace, the VIX set new highs, more than 90% of closed-end funds were trading at a discount (much higher than normal), and a perma-bear like Jeremy Grantham was turning bullish.
We were just waiting on one more: the market to react positively to horrible news.
Over the past few weeks, we’ve seen just that. When Citigroup declared it was about to go under, the market went up. When the market learned 533,000 jobs were lost in November (much more than even the worst-case expectations), stocks went up. The market is skipping right past otherwise horrible news.
That’s not all. Although we have all five signs of a market bottom we’ve been waiting for, there are quite a few more reasons to start turning more positive on the markets.
Discounting the Future
The market is supposed to be a forward-looking discounting machine. It’s supposed to price in what’s expected to happen over the next few months and years.
Is the market perfect at this? No. If it were, there would be no real opportunity to do well in it.
The market is, however, very good at incorporating what the masses expect for the future. It does it all in one quantifiable place, and right now, those expectations are for a turnaround to come sooner, rather than later.
The recent rallies have shown the market is anticipating the economy to stabilize and possibly begin its recovery in a matter of months. Just take a look at what is happening.
Goldman Sachs’ research department (yes, I know, who would listen to them after all that’s happened between a $200 oil forecast and the credit crisis and all?) released some historical precedents on how the market anticipates a recovery. In their defense, predicting the near-term future is darn near impossible, but these are historical facts. According to the bank:
The S&P 500 tends to bottom:
One quarter before the GDP bottoms
3 months before the ISM manufacturing survey bottoms
7 months before the peak unemployment rate
4 months before the largest decline in non-farm payrolls and
4 months before the bottom in consumer confidence surveys
If the market truly did hit rock bottom in November, we can expect a genuine economic recovery somewhere between March and June of 2009.
Believable? I wouldn’t bet on it, but it’s certainly possible. So, here’s what to do.
Where Do We Go From Here
If history is any evidence, it’s time to buy stocks.
The five signs of a market bottom are in. All the investment legends have turned bullish: Buffett, Grantham, Heebner, etc. We also got the market starting to anticipate this recession ending in less than a year. (Granted, I’m still concerned too many people are watching for a bottom to actually happen).
Of course, I’m still hesitant on calling “the bottom.” Trying to time the bottom is a fool’s game. Even though, it’s certainly tempting to do so after watching the market climb for two days. Frankly, there are still a lot of unanswered questions posing a lot of risk.
When will the housing market hit bottom? How will overleveraged commercial property companies fare? How bad will this holiday shopping season really be?
However, there still are some even bigger questions we have to deal with. Like, how high will the unemployment rate go? I’m still expecting it to top out over the summer in the 8% to 9% range. From that point, an economic recovery will really take quite a bit of time to get going again.
The government isn’t helping matters either. For instance, when will the government stop borrowing hundreds of billions of dollars from the banks (T-bills currently yield 0.01%) and trying to figure out why the banks don’t have the extra cash to lend to profit-seeking businesses? How much capital is going to override market forces and determine the best place for investment? Will it be roads and bridges, alternative energy, or electric cars?
There’s just too much uncertainty out there right now to go “all in.” I still recommend sticking to the plan of buying stocks consistently over the next year. You have to keep enough cash on hand to live and just in case an even better buying opportunity comes along to pick up stocks even cheaper. For now though, I’m still buying stocks and sticking to the plan.
The Three Places I’m Buying
Here are three places that I really think some great returns can be had in the next few months, and years:
1. Biotech
Over the next 10 years, stem cells will change the world we live in. Every week a new development is made and the research is ongoing. It’s reaching that point where stem cells are at the verge of going mainstream.
There are already some amazing stories cropping up about the effectiveness of stem cells and there are only going to be more and more over the next few years. Stem cells are making miracles happen and the last 20 years of research are starting to pay off.
Here at the Prosperity Dispatch, we fully expect biotech (stem cells in particular), after years of underinvestment, to have all the legs of a major bull run and the real possibility of forming the next bubble. It’s only a matter of time until the market realizes it.
2. China
Over the past few months, shares of Chinese companies have held up remarkably well. This time around, the China boom is going to look a lot different. The last decade has been led by China building infrastructure and working aggressively to become the manufacturer to the world.
The next boom in China will come from the maturing of the economy as it slowly starts to move away from the highly cyclical manufacturing industries and into less-cyclical service industries.
If China is where the U.S. was at 100 years ago, then there are many great years ahead. If the U.S. were where the U.K. was at 100 years ago, I’d definitely continue to look outside the U.S. for long-term opportunities.
3. Gold
Although we’ve taken the past few days to look at gold and when (and if) a bull market will resume, and a few different ways to get in on what could be a big bull run for gold, there’s one thing that really has caught my attention recently.
The XAU/Gold ratio is a measure of index of leading gold mining companies (XAU – Philly Gold and Silver Sector Index) relative to gold price. Over the past 25 years, the XAU/Gold ratio has been 0.25. That means the XAU index would be about ¼ the price of an ounce of gold.
On Monday, the XAU closed at 94 while gold closed at $760 an ounce. This makes the XAU/Gold 0.124. That’s less than half the ratio’s long-run average and just off the 25-year lows.
It’s either a very bullish sign for gold stocks or a very bearish signal for gold. Something has to give and I’m currently working out a short gold/long gold stocks trade to capitalize on it.
All signs point to a bottom, at least in the near term; however, in a market like this, it all could change in a matter of minutes. A single warning of more trouble ahead for China, another surge in unemployment, or more disastrous retail spending in the U.S., could easily put the brakes on any rally.
There are several concerns still facing the market and two strong up days like we’ve just had can easily create a false sense of confidence, but if you develop a plan, buy top-quality stocks in sectors which have exceptionally bright futures, and are willing to go in for a couple of years, you should be just fine.
Disclosure: None
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This article has 55 comments:
Put EPS on an S&P chart. You will see that the sustained 2003-2007 rally didn't begin until long after earnings had crashed and AFTER they begun to rise once again.
And if you look at the EPS during the rally, you'll see it goes up.
Of course there will be intermediate ups and downs-we're in a 18% upswing on the S&P right now from the Nov. 21 low. But these are moves for traders, not investors.
Stocks are probably more likely to move up and down like this without a sustained rally for several years because earnings still have further to fall.
The ones who saw price declines coming and bought debt are way ahead of the game. Why? Because in the three months to October, headline CPI fell at a 4.4% annualized rate which means during that time they were earning maybe 8% annualized. And they got to sleep at night.
"It’s either a very bullish sign for gold stocks or a very bearish signal for gold. Something has to give and I’m currently working out a short gold/long gold stocks trade to capitalize on it."
That's a valuable tip--an arbitrage play looks like a near "cert." And it's an "angle" that neither gold bugs nor gold bears is likely to notice, they being too emotional and one-sided in their view of the topic. (I suspect the mining stocks got pushed down relative to bullion when the cost of oil spiked, but the market failed to readjust when the price of oil declined.)
**************
LFB said: "Stocks are probably more likely to move up and down like this without a sustained rally for several years ..."
I agree--I think people are too focused on the question of UP vs. DOWN, and ignore the more likely possibility of sideways thrashing, which will whipsaw investors. I think that 8900 is a near-term top, for instance. A less volatile play than stocks, IMO, for a person who doesn't think the roof will fall in, would be junk bonds, which seem oversold. (See the Dec. 15 issue Business Week column on them, "How to Judge the Junk.")
Too many people still have the psychology that this is another in the line of shallow recessions. Wake up folks! This is a one in a hundred year event. This is a deep recession. This is a deep bear market. Periods such as this when researched show that the bottom is in place when we have at least 6 months of trading within a narrow range. We hit a new low just last month, so I have not seen 6 months of sideways action yet.
Keep on trying to find that bottom. If somehow on your ninth try you actually hit it - yipee!!! The smarter money however will hold off establishing longs until the market shows signs of stabilizing (at any price) for 6 months. Big drops like this take a long time to stabilize and do not do it in a month or two, so you have plenty of time to get on the bus when it actually gets here, mso what's the hurry?
Volume and money flows will indicate how far this rallies goes.
SPY volume was actually 80 million less yesterday than on Friday's rally. See if that continues to give you a good idea of how long this pre-santa claus rally lasts.
Current Wilshire 5000 has P/B ratio: 1.6
1982 Bottom P/B ratio: 1.0
1974 Bottom P/B ratio: 0.75
1932 Bottom P/B ratio: 0.50
How can a long term bull market start with Market P/B at 1.6? This is more like a sucker's rally of Spring 1930.
Earnings are going down a lot further than estimated and the employment situation has much further to worsen. Consumers are deleveraging and they won't use credit (if it's even available) for quite some time.
Why on earth would anyone expect consumers will spend when their assets (home and 401k) have been devastated.
Mohamed El-Erian of PIMCO has it exactly right. We are not returning to business as usual. Rather, we are facing "the more nasty reality of a volatile journey to a different destination."
That about tells it also with this so-called "market recovery". Much, much more social and economic damage and corruption is covered up in Washington than we ever know about, and anything done to "correct" now merely covers it up until the next time. Nothing is ever really solved, and the house of cards called capitalism ges weaker each time until final collapse. No way anything substantive and permanent gets solved if this present system repair takes less than 10 years of national pain to do it.
I think we need a term for people who envisage a sideways, zigzag market. (These people have been overlooked--they're the excluded middle-of-the-roaders.... It needs to be an animal whose name begins with a "B" for the sake of alliteration. The only animal I can think of that habitually runs in an unpredictable, zigzag fashion (to evade predators) is the hare or rabbit. Fortunately it has a third "handle" that fits the bill: Bunny.
I have spoken.
The folks who think, like Mr. Grantham, are sitting atop piles of cash awaiting opportunity. The sheep who follow, like most, have been sheared.
There are TONS of Undervalued stocks out there waiting. Start to pick at them now because the market tends to rocket up quickly at the beginning of a recovery. You could miss these low prices.
I have posted a series of Value Investing articles on my site that guide investors to picking undervalued stocks. Buy within the next few months, or you could miss the train.
Maybe for some...
Govt allows banks to use toxic assets for loans to buy treasuries, pushes price of treasuries up, foreign govt's also want treasuries as their currencies tank. Interest rate goes to zero.
Gov't is flush with cash, goes on the biggest building spree since whatever year. Bridges, barracks, roads, bio tech, clean energy tech, stem cells, tunnels, levees for new orleans, schools, hospitals. Everything a caring government might build with oodles of free cash. If this creates any economic activity at all, it's a net gain for the gov't and everyone who invests.
Probably also a great time for small business sub contractors.
Allocate accordingly.
On Dec 09 06:52 AM The LFB wrote:
> I really don't know why you and everyone else who writes about this
> stuff doesn't see this:
>
> Put EPS on an S&P chart. You will see that the sustained 2003-2007
> rally didn't begin until long after earnings had crashed and AFTER
> they begun to rise once again.
>
> And if you look at the EPS during the rally, you'll see it goes up.
>
>
> Of course there will be intermediate ups and downs-we're in a 18%
> upswing on the S&P right now from the Nov. 21 low. But these
> are moves for traders, not investors.
>
> Stocks are probably more likely to move up and down like this without
> a sustained rally for several years because earnings still have further
> to fall.
>
> The ones who saw price declines coming and bought debt are way ahead
> of the game. Why? Because in the three months to October, headline
> CPI fell at a 4.4% annualized rate which means during that time they
> were earning maybe 8% annualized. And they got to sleep at night.
>
>
2) In addition, don't we need to retest the 7500-7600 level on the DOW that occurred on Nov. 21. No, it just cannot be as easy as you have described.
3) There may be substantial tax changes coming next year. History has demonstrated that major tax changes upset the market due to the uncertainty of the effects of the changes.
Right now we trade what we see which is good market action [until proven otherwise].
It's true that we had a rally but after a free fall market. It's sure that news were not good, still market got up, but take in account that 2 month ago news were a disaster, with many institutions failing and plans of billions running.
Yes, now companies make lower predictions and fire people, but this has not such an impact as bailouts in financial sector.
Stem cell research and therapy are going on like crazy, there are more than 1300 clinic trials under FDA watch as of now, most on adult stem cell therapy from bone marrow - the most effective stem cells.
There's a company best positioned to benefit from the coming wave of stem cell work and therapy, it's the company that provides the tools and equipmennts to harvest, concentrate and store the stem cells from cord blood and bone marrow.
Thermogenesis, inc. stock symbol KOOL. The stock price came down hard recently due to market condition and a volunteer disposable bag recall affecting a few lots of bags.
The 4 product lines have no competition they raised price 25% in July, 2008 and expect to become profitable in 4th quarter ended June, 2009.
I expect we'll see the Dow make new lows before mid-January. Come back and rate after Jan. 15th!
Question: If biotech booms as you say, what would be secondary/tertiary beneficiaries? I ask because I am long tech, and wonder if biotech would be a strong or weak catalyst for tech in general.
Do your homework, learn, and don't play with cash you don't have.
the L is coming. We have been in the fasaud of a bull downturn bear upturn.. now then, I said it -hated to but it neccessated circumstances. For sure, we are in a recession how long is still uncertain.
Anybody here willing to challenge my thesis on it feel free but remember when you go in and things don't happen like you figured; in other words you lose more.. you have just you to blame.. you cannot even listen to pundents as they chart watch and listen to mgrs who guess...at best. I love the addage.. I can miss the first 20, ride the next 60 and be vigilant on the last 20.
Bottom line.. hold off things are so cheap yet you will be fine.. I am hoping I can practice what I preach as these stocks do tempt me.
On Dec 09 10:45 AM Carl Spackler wrote:
> All of these signals - high VIX, the gurus buying stocks, market
> rising on bad news, etc... have been flashing for 5 months. What
> has that gotten investors - losses. I am always amazed at how many
> people will try to find the bottom of a market only to get hammered
> further. To me, it is the surest sign that there is more room to
> go down.
>
> Too many people still have the psychology that this is another in
> the line of shallow recessions. Wake up folks! This is a one in
> a hundred year event. This is a deep recession. This is a deep
> bear market. Periods such as this when researched show that the
> bottom is in place when we have at least 6 months of trading within
> a narrow range. We hit a new low just last month, so I have not
> seen 6 months of sideways action yet.
>
> Keep on trying to find that bottom. If somehow on your ninth try
> you actually hit it - yipee!!! The smarter money however will hold
> off establishing longs until the market shows signs of stabilizing
> (at any price) for 6 months. Big drops like this take a long time
> to stabilize and do not do it in a month or two, so you have plenty
> of time to get on the bus when it actually gets here, mso what's
> the hurry?
Pardon me for being a skeptic, but I took a lot of math in school and have lived through a number of decades in my life where I learned that the future either, 1) has little or nothing to do with the past, or, 2) it has a lot to do with it. Unfortunately, you never know before the future arrives in the present, and then slips into the past, whether your predictive model was correct or not. If you are dealing with "will the market go up for awhile" or "will it go down for awhile," then your predictive model has about a 50-50 chance of succeeding. This is the same chance you get from flipping coins. And don't forget, flipping coins can produce some stretches of 3,4,5,or 6 or even more, heads or tails in a row. This is, of course, a "trend" which tells us exactly what? The future? I'm afraid not.
Mathematicians either laugh or express sadness when they hear about the gullibility of people who think like this. But in the long run its probably no worse than any other method of trying to make money in the market. In the end, the direction we head, is based on an emotional reaction to what we think will happen in the future, and for those of us human beings who don't have crystal balls, this is what we are stuck with.
But please, try and understand this: there is nothing whatsoever scientific or mathematical about "charting." If you think there is, then you don't understand what science is all about. You can prove this to yourself by trying to read charts from the past, where you can see what the "future" holds immediately by turning to the next page of the book, or the web site. You will quickly learn that it is impossible to predict the future in any way, manner, or form, better than mere chance.
My suggestion, for what its worth, is to concentrate on the macro view. For example, unemployment figures, bankruptcies, consumer sentiment, wholesale purchasing, ocean shipping in dry dock, asset values, bank failures, downsizings, etc., taken as a whole, world wide, and trending the same way together, in a way not seen since the Great Depression, says that we just might be in deep, deep, trouble. Unless of course, you think these things can all turn around faster than they started dropping. The likely hood of that? My experience tells me less than a 50% chance. But I guess that judgment is about the past, too, isn't it?
See what I mean?
That said, you have to question the validity of an author that has a headline like "is it time to buy?" and then talks about technical analysis and concludes with three absolutely random recommendation. I particularity don't get what biotech has to do with any of the discussion. As a non-US reader I also enjoy when people talk about investing in "China". What is that exactly?
The situation is simple really. All Americans over borrowed: government, companies, consumers. Risk capital was replaced with leveraged. As a solution: lean on the only thing still standing, the infallible US dollar. Print lots of them.
There is a real problem and all that is being done is moving it around. There is no magic, the problem will not disappear. Sensibly for the US citizens the problem is being shifted as much abroad as possible: to Russia, China and Japan, the biggest holders of USD. Once they have been scammed out of their savings, who will believe the USD anymore?
Advise: "short the US"
This maybe the opportunity of a life time.
Shipping companies are the best examples
for the last few days.
Citing history is great. It is important to remember the mistakes of the past. But it is also important to remember that someone is always inventing a "better mousetrap". There is always some new wrinkle which you also need to factor into your calculations to have a prayer of being correct. You don't seem to have done this. The market definitely seems to be ignoring it. Some of the loans to emerging market countries may soon be in default. These will trigger CDS activation conditions. If the Senate doesn't act quickly the CDS's pertinent to the Big 3 may soon begin to be felt. This whole thing could cascade again. Credit could freeze up again. I don't like what I am seeing. We could be a week or two (or a month) away from a major meltdown.
Buffet and company may not have seen in the past what may occur for the first time in this market crash. They are likley still not buying in at the high, so they may still be okay in the long run. However, if you are investing money you want a good return on in the next 2-3 years, youu may wish to sit on the sidelines a little longer. It's probably better to be careful when you are not as rich as Buffet.
US $13.8 trillion.
China (from Wrold Bank) $5.33 trillion.
This has likely narrowed somewhat in 2008.
Good overall analysis. Thank you for your work.
There's far too much talk about bottoms and how long this downturn will last. How about some talk about great companies selling on the cheap.
If you think their earnings are too high now and will be cut later, discount them 15% and work from there. That's what I've been doing for forty years in down markets and economies, and it works, because it puts you in stocks that have a lower downside risk than most.
Companies with great balance sheets and great products and great management will come booming out on top of the current mess.
Forget about bottoms and such nonsense; testing lows and other busted-out terms.
If you have the money available to invest, put it to work and forget about the ups and downs and one-day news events that the 24-hour financial media pump up as important. Most are not, especially over the next year to 18 months.
By this time you can rest asssured that most every bit of bad news is priced into stocks. Oh yes, there will be some surprises, and traders will jump and hop and holler and scream; but a day or two later a new boondoggle will be riding the horizon as hard or harder than the last one. And on and on and she goes as long as the media are negative and economic numbers can be searched out to be bad.
But the management of good companies with plenty of cash and little to no debt will march right ahead building their product lines, cutting out the deadwood, building out where they need to when things are cheap — in full anticipation of the boom to come.
It's a law, you know: the bigger the boom the bigger the bust, and vice versa.
Nokia (NOK), Cisco (CSCO), CF Industries (CF), France Telecom (FTE), Huaneng Power (HNG), Pfizer (PFE), 3M (MMM), Statiolhydro (STO), Taiwan Semi (TSM), Frontline LTD (FRO), & United Tech (UTX) are just a few of the reasonably priced great companies that will come out of this downturn in better shape than their competitors.
I own these. And I believe they can weather the hell fire the world is going through and when it's over be sitting in even better positions than they were when the match was first lit that has scorched our financial world.
This ought to be a good enough spread of companies that the wild-eyed Obama's leftist programs can't get to the lot of them. I hope!
I feel sorry for you and anyone who would follow your lead. Apparently, you think that "history" started in the 1990's.
I would urge all SeekingAlpha users to take a little time, go to their local library, and review the microfilmd New York Times for say 1929-1939 -- Emmmm... You may be asking yourself, "Now where have I heard all of this before?"
This is going to end very, very badly -- perhaps as soon as a few months from now. There are major structural problems with our economy and following advice here, CNBC, etc. will not help you get ready for what will be going down.
Just keep in mind, the smartest guys in the room are now batting zero when it comes to predicting how bad things will get -- even a week into the future -- forget months or years.
I feel sorry for a lot of the people on this site. You'll all be looking for jobs in the not too distant future.
As for calling a U.S. market bottom, even the gurus are getting this one wrong because they didn't live through the Great Depression themselves. This is one of those times when reading history is more useful than applying standard analytical techniques or timing news events.
Maybe it is because you won't get a commission from making a sell call.
Retirement is up about 3% on CD's
Sucks but the alternative would have been worse.
BTW ALL my little expert helpers claimed the down turn wouldn't last. LOL
Simple reason really. My contracting company was getting fewer and fewer calls. Had to let workers go, Still no work to hire them back. Job calls near zero and I had no direct exposure to new homes.
This is the time to buy stocks? LOL Not even close.
Unless of course unemployment offices now trade on the market.
You'll know when it's time to get in when your neighbor or friend finds a job somewhere.
Bob
Sorry new to investments.
thanks
Elly
On Dec 09 11:07 AM Bottom fisher wrote:
> www.wilshire.com/Index...
>
>
> Current Wilshire 5000 has P/B ratio: 1.6
> 1982 Bottom P/B ratio: 1.0
> 1974 Bottom P/B ratio: 0.75
> 1932 Bottom P/B ratio: 0.50
> How can a long term bull market start with Market P/B at 1.6? This
> is more like a sucker's rally of Spring 1930.
I have no idea where the market goes in the short-term (no one does) but I not ready to build an ark either.
consequencesunintended...
P/B is the ratio of the stock Price per share to the company's Book value per share. How can you agree if you don't know what it is? In this case accounting changes (mark to market) and inflation would suggest that you would have to adjust the past statistics to arrive at comparable numbers.
On Dec 12 11:29 AM ellyr wrote:
> I agree with your point in general. What is the B under the Price?
>
> Sorry new to investments.
>
> thanks
>
> Elly
It is time to start accumulating. Dollar cost average.
Buy value stocks and hold them long term i.e. 3-5 years and you'll make out like a bandit.
On Dec 09 11:26 AM juan77 wrote:
> The time to buy was when Warren Bufett said it's time to buy. Even
> as so called analysts were procrastinating, the market has quietly
> gone up and stocks aren't the screaming bargains they were a few
> weeks ago. I am not saying that the market will go down, but even
> if it goes up, it's not going to go much higher either.
> For once, I would like to see atleast one analyst telling people
> to buy when there's blood on the streets. Telling people to sell
> when stocks are already down and then telling them to buy when stock
> prices go up is not great advice.
On Dec 09 09:47 AM Roger Knights wrote:
> "On Monday, the XAU closed at 94 while gold closed at $760 an ounce.
> This makes the XAU/Gold 0.124. That’s less than half the ratio’s
> long-run average and just off the 25-year lows.
> "It’s either a very bullish sign for gold stocks or a very bearish
> signal for gold. Something has to give and I’m currently working
> out a short gold/long gold stocks trade to capitalize on it."
>
> That's a valuable tip--an arbitrage play looks like a near "cert."
> And it's an "angle" that neither gold bugs nor gold bears is likely
> to notice, they being too emotional and one-sided in their view of
> the topic. (I suspect the mining stocks got pushed down relative
> to bullion when the cost of oil spiked, but the market failed to
> readjust when the price of oil declined.)
> **************
>
> LFB said: "Stocks are probably more likely to move up and down like
> this without a sustained rally for several years ..."
>
> I agree--I think people are too focused on the question of UP vs.
> DOWN, and ignore the more likely possibility of sideways thrashing,
> which will whipsaw investors. I think that 8900 is a near-term top,
> for instance. A less volatile play than stocks, IMO, for a person
> who doesn't think the roof will fall in, would be junk bonds, which
> seem oversold. (See the Dec. 15 issue Business Week column on them,
> "How to Judge the Junk.")