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Re: Soapy Bubbles post# 25

Sunday, 03/08/2009 1:31:27 PM

Sunday, March 08, 2009 1:31:27 PM

Post# of 53
I appreciate your input! I'll pick some up as soon as our baby gives us the long-anticipated PR.

While DOW 6,000 makes me sick too, the P/E in 2000 was 43, which is obviously unsustainable. The people who became intoxicated with optimisim at the peak will be the same people who panic in the end and sell at a single digit P/E ratio. People have a herd mentality and make emotional decisions instead of business decisions. That's why long-term bear markets usually end with the P/E ratio in the 5 - 8 range. Considering we are at about 12 right now, the DOW will almost certainly fail to hold 6,000 and we have to consider a breach of 5,000 a real possibility. A counter-trend bear market bounce will give the herd reason to be optimistic and many will fall victim to a suckers' rally.

All just my opinion but I've been expecting this type of crash. There will be some amazing buying opportunities for independent thinkers who don't get wiped-out on the way down!
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