Replies to post #145859 on Zeev's Turnips Patch-No Politics (ZEEV)

[DlphcOracl]

Sorry, George, but you've been wrong all year on this market and I see no reason to think you'll get it right between now and the end of the year.

Any correction in September and October will be mild, probably 7-10%, 15% at worst (although I doubt it will be this bad). It has nothing to do with valuation or fundamentals --- it is ALL about increased appetite for risk on the part of investors, both institutional and individual. There are too many money managers who did not believe the rally from the March lows, are still underinvested and underperforming the indices, and are chomping at the bit to jump in for the anticipated Fall swoon. Simply put, because everyone is hoping for it anticipating it, it ain't gonna happen.

Market will resume another leg up beginning sometime in October and carry well into 2004. The piper will be paid much later, probably after the 2004 election. You will eventually be proven correct, but the correction will begin at levels you have not dreamed of. Meanwhile, you will have missed a very significant two year bull market.

[CoalTrain]

There is little doubt that the economy will improve some over the next year IMHO because of UNPRECEDENTED monetary and fiscal stimulus. That said, the improvement will be small considering the huge amount of stimulus applied. And the price that must be paid a little ways down the road because of the huge Fed induced jump in consumer debt outstanding will be quite severe I think


That is why I expect a sharp stock market correction this fall DESPITE the prospect of some pick-up in the economy.


I am expecting next year to be a very bad year for Europe. Some friends of mine that own youth Hostels and in former Soviet block countries, Hungary, Romania etc. have been doing great business as the world economy has been slowing down. People who could not afford to vacation elsewhere have been taking advantage of the cheap prices in these places. Until this summer that is. This summer has been horrible even before the heat wave. When the German youth cannot scrap together enough money to travel to Budapest it does not bode well for the economy. I think also next year there is a good chance that the "creative accounting" that EU now allows is going to come home to roost compounding problems further.

CT