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So, basically this moron is saying, that the market will rebound because:
1) 4 down years in a row are rare. Yeah, so are bubbles and bear markets like this one.
2) The 3rd presidential year is good. Yeah, and so is the election year. Was year 2000 good?
3) Investor psychology. According to the author, as bear markets near their end, the optimists get even more optimistic and the pessimists get even more pessimistic. I'd like to see a chart supporting this notion. Besides, what pessimists? The lunatic fringe like us doesn't count. Everybody else is either optimistic or hopeful. (The difference between the two is that the optimist is convinced that things are going to improve. The hopeful person knows deep inside that they won't, but still hopes that they will.)
4) Interest rates won't rise. Yeah, and they fell for the past two years, too. Did that help the market any? So, if even their fall didn't help, how would their non-rising help?
5) Public pension funds will be buyers. "Municipalities and states plugging gaps in their pension funds will be big net buyers of stocks and bonds this year". Excuse me? Underfunded pensions is supposed to be bullish? Municipalities and states are at record deficit levels ever and will be too busy trying to figure out how to survive - not how to invest even more money in a falling market.
Regards,
Vesselin
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Five Reasons Why The Market Will Rebound
and why they are all bogus
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#2
PileDriver 
- Professor of Stock Proctology
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Posted 22 February 2003 - 02:02 PM
Hey, its classic slope-of-hope flawed thinking.
Means we can work lower.
Means we can work lower.
#3
machinehead
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Posted 22 February 2003 - 02:55 PM
Ken Fisher is a pretty smart guy, so I wouldn't totally write off what he says. Actually I only have a minor bone to pick with his penultimate point:
"The fourth reason to expect a rebound in 2003: Professionals overwhelmingly forecast a big move up in both long- and short-term rates this year, and the possibility of this bearish development is already figured into stock prices."
Hang on there, Ken. Since 1998, the correlation between stocks and interest rates has inverted. Low interest rates have accompanied falling share prices. And on days when the stock market pops, so do yields.
When you look farther back in history, it was actually just during the inflationary years from the Sixties to the Nineties that falling yields were bullish. For a hundred years before that, interest rates were a poor guide to stock prices.
If anything, rising yields in 2003 (especially on the long end) would be bullish for awhile, because it would mean that deflationary fears are easing.
"The fourth reason to expect a rebound in 2003: Professionals overwhelmingly forecast a big move up in both long- and short-term rates this year, and the possibility of this bearish development is already figured into stock prices."
Hang on there, Ken. Since 1998, the correlation between stocks and interest rates has inverted. Low interest rates have accompanied falling share prices. And on days when the stock market pops, so do yields.
When you look farther back in history, it was actually just during the inflationary years from the Sixties to the Nineties that falling yields were bullish. For a hundred years before that, interest rates were a poor guide to stock prices.
If anything, rising yields in 2003 (especially on the long end) would be bullish for awhile, because it would mean that deflationary fears are easing.
"GOLD -- it's not just for misers anymore."
"Dollahs -- fire-starters for the K-wave winter." - Drano
"Three humps and a dump." - anotherone, 21 SEP 2004
"No gold was harmed in the making of this movie." - Bizarro Greenspan
[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals." - our jickiss
"Dollahs -- fire-starters for the K-wave winter." - Drano
"Three humps and a dump." - anotherone, 21 SEP 2004
"No gold was harmed in the making of this movie." - Bizarro Greenspan
[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals." - our jickiss
#4
ApresMoi
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Posted 22 February 2003 - 03:50 PM
If Fisher's wrong, he's wrong because he's based his analysis on the assumption that U.S. equities are/have been in a bear market. And of course, nothing could be further from the truth.
As Shiller and others have pointed out, p/e ratios got out of hand starting probably sometime in 1995. For the past 2 1/2 years the market has been searching, in fits and starts, for a proper level given what it foresees for the future, presumably, high single digit profit growth in a low inflation environment. What the proper p/e ratio should be in those circumstances has yet to be decided.
We may yet enter into a bear market (my vote would be a steep drop starting below 750 on the S & P 500). But until we do enter a bear market, the histories of past bear markets are irrelevant.
As Shiller and others have pointed out, p/e ratios got out of hand starting probably sometime in 1995. For the past 2 1/2 years the market has been searching, in fits and starts, for a proper level given what it foresees for the future, presumably, high single digit profit growth in a low inflation environment. What the proper p/e ratio should be in those circumstances has yet to be decided.
We may yet enter into a bear market (my vote would be a steep drop starting below 750 on the S & P 500). But until we do enter a bear market, the histories of past bear markets are irrelevant.
#5
Downtick
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Posted 22 February 2003 - 04:01 PM
I have no idea how the year will end up, but I hope to short it to the bottom and then ride it to the top. Where it stops on December 31st is of little concern to me. It is just a date. But if I had to make a call, I'd say we end up for the year after one nasty selloff in Sept/Oct.
JMHO
JMHO
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