Zeev's Ideas

[Koikaze]

ZEEV, MARKET/ECONOMY - up to ZEEV:348415, 01/23/05

01/22: (348300) (*COMMENT*)
Marketmaven. LOL. Gutsy no doubt. Keep in mind this isn't going to be a crash boom event. But I clearly amof the opinion that we are indeed are at the threshold of a substantial bear market. I look as far back as ten years. This will take time to hit. But clearly below 10000 is a coming. ;) RE: DOW
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Below 10,000? that is barely a scratch and only 393 Dow points from where we are, by late October, I believe we will have had a print under 8000 on the dow, now, that is a bear....


01/23: (348341) (*COMMENT*)
When the peak is reached, care to give top choices for a "short" ride to below 8,000 on the dow? I know youy don't short, but humor us.

The 64 million dollar question. When is the time window ripe? FEB/Mar. Hope those turnips are well fertilized (g)

I think my list will start with T (ATT)
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The best I can suggest is #msg-5129606, with a potential top 2/23 or there about (Jim has 2/28-29 I believe).


01/23: (348342) (*COMMENT*)
zeev,,,what sectors get hit hardest the next 10 months of bear?
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Semi should get hit hard (remember I have a target of $12/$13 for a low on INTC...)


01/23: (348350) (*COMMENT*)

(Part 1)
ZH - and what for the economy? Is there a depression to accompany the drop of 2,500 Dow points?


(Part 2)
There was no depression in 2002 when we hit 7500 on the Dow, why would you expect a depression?


(Part 3)
ZH -

1. It was incipient.

2. The Fed was lowering interest rates to the lowest point in nearly a century.

3. Oil was below $30brl.

4. We had just had the effect of 9-11 together with a severe correction that started in March 2000.

5. European economies were not badly hit.

6. Russia and China economies were happily expanding without talk of the need to hold them back.

7. Even if it wasn't fall inot a depression we all remember earnings seasons two years ago the earnings were dire.

8. Fiscal and monetary stimulii were available and were deployed. I am not sure they are so readily available today.

9. Confidence. The most important factor in the market and in the economy is confidence. A collpase below 10k never mind one to the depths of 8k would in my view deal a massive blow to business confidence here and probably world wide. With no apparent end to the market malaise it is not clear to me what measures would turn it around at that stage.

10. It is also clear that in such circumstances OPEC would take measures to reduce production inorder to maintain prices. China and India would find that their economies were suffering and that would not be helpful. China is working very well so long as it offers increasing relative prosperity to its population. Were that process to be interfered with I do not think it would be helpful to stability. Same sort of thing with India.

Just a few of my thoughts. And I haven't mentioned a material increase in unemployment and its effect on the budget deficit.
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But a depression? I said I expected a consumer led recession, not nice, but not the end of the world, just normal part and parcel of rebalancing the economy.


01/23: (348415) (*COMMENT*)
INTC - $12/$13 is mighty low. Are you anticipating that their fundamentals will deteriorate (perhaps something like Dell deciding to use both AMD and INTC), or are you just expecting INTC to be taken down with the rest of the market?
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Triple whamo, IMTO, first a general decline in chips sales, stiffer competition from AMD, and reduction in margins (these are historically low, amongst other things, because depreciation rates have declined with INTC restraining capex (note the decline from B$6.47, for 01 to B $5.07 in 2003 and to $4.81 in 2004). With INTC picking back its capex to the $5 B plus range, depreciation is going to mount back and the 56% margins may not be sustainable. That with a market that is going to contract PE and a possible downturn in earnings late next year (getting for all of 2005, maybe 1.10 rather than $1.25 the market think INTC will get), would, at the extreme of under pricing the stock get us possibly to the 12/$13 range, mind you that is the max downside I see.