MMMPARSLEY1

The Bear Turns Mildly Bullish

Hammerhead,

I totally agree with you that the US markets that operate and sell their products within this country are going to struggle. However, with inflation running rampant, do you really think the DOW is going to go down when it's pegged to the dollar? I'd rather have my money in producers than in cash.

That being said, I wouldn't put my money in one of those companies. However, as paper money loses its value, what do you think is going to pick up the slack? International stocks are trading at very attractive PE's after today. Those economies are still going to grow despite trouble in the US. In fact, they developing countries may stabilize their economies more than ever in the past as they stop subsidizing our debt and begin consuming their own resources.

Do you really think that with all the American companies which are world-class innovators with current of potential global products are going to go down in dollar value? The way I see, as new money hits the market, all speculative innovations go up in dollar terms.

The one thing I wouldn't want to be in is bonds. 2008 is going to be the year of inflation.

The Bear Turns Mildly Bullish

Wake up. We aren't lemmings, we are investors.

Volume is not higher than in mid-August. What you are seeing is a bubble bursing stemming from heavily margined accounts. Corporate earnings are slowing, but global growth remains strong. Even if it didn't, the cash printing press is flooding the market with new cash, so unless you think none of that cash is going to find it's way into the equity market you should be holding tight through the drop.

International growth is still very strong and most country's PE's are still rather low - especially considering the torrid growth rates. Slowed growth is more than priced into foreign equities right now, so put 2 and 2 together and realize that the heavily margined are paying a severe price for their greed right now. We're putting the flailing out of their misery while rewarding those who put capital aside with very cheap prices on equities.

The Bear Turns Mildly Bullish

Some Russell 2000 stocks can't go much lower. Many are trading well below book value as if these mid-tier companies are bankruptcy candidates - and they most assuredly are not.

The market is way oversold, and we're seeing traders heavily margined forced to capitulate to savvy trader who are scooping up shares at a bargain.

There is no reason for Asia to go down. Many countries are still trading at 10-15 PE's and have very significant positive balance of payments. Asian consumers have only begun their spending spree. Many of these companies are trading at VERY low PEG ratios so there is plenty of room for slowed growth already priced into these foreign equities.

The only market that is still arguably overbought is in Shanghai. US traded Chinese ADR's are valued rather nicely right now, with a few expections such as BIDU, CTRP etc.

Fundamentals are all that matters in the long run - and stocks are fundamentally undervalued even when adjusting for slowed global growth.