Replies to post #55788 on Zeev's Turnips Patch-No Politics (ZEEV)

[lurqer]

You seem to have completely misconstrued my previous post. Go back and completely ignore the '29 part of that chart. None of my comments had anything to do with '29 or the Great Depression. Just look at the '00 to '02 part as you reread the post. I am sorry that the chart also included some '29 to '32 data that misled you.

As for a comparable period to the present, for both demographic reasons and the behavior of the Fed, the '66 to '82 secular bear is a better template for our current period IMO. For both the duration and severity of our current secular bear, you are more sanguine than I am. I have references to at least three different demographic studies that all point to 2018 before the next secular bull begins. That doesn't mean that it will happen that way , but it certainly raises the possibility.

As for the P/E behavior in the latter part of this secular bear, for me, that is yet to be determined. It critically depends upon whether through an unwise monetary policy, we again, as in the latter stages of the last secular bear, have a period of double digit inflation. Without the sever inflation, I would expect valuations to bounce after a valuation low in the 7 to 10 range, and remain above that level while the market price oscillated at a low level until the start of the next secular bull. With double digit inflation, I would expect further deterioration in the P/Es as the market price oscillated.

Again JMO

lurqer

[Captain_Jack]

Zeev-- have had approximately the same thoughts as you with the exception of the nas. I actually looked for things to happen much faster than they have. There are still questions why some companys are still swimming against the BK current. Of course one must still wonder why some on other exchanges still exist too,, especially in the air line sector (US Air & ual should go POOF). Additional consolidation is required to dry up excess capacity in order to improve pricing and profits in the next few years. The thought of a volatile or lower mkt is understandable but a crash on the order of '29 is not probable. There have been many measures put in place over decades (and hours -- ext unemployment benefits) to curtail the possibility and not all ammo loaded yet either.

[Laser]

Zeev....regarding your Dow Gambit...first off thank you for sharing it and I hope it is a successful as your last foray...you mention a potential 10-20% return on this go around. I did a hypothetical and assumed I split my portfolio in equal dollar amounts across all of the stocks and I bought them at the suggested entry and sold them at the suggested exit. Unless I made a mistake, this would yield just under 13%.

Ignoring the assumption that some of these may stop out for a loss, how can you realize the potential upside to 20%. Would this be through better entries, better exits, or a different weighting across the issues. I'm just trying to figure out how to take best advantage of the gambit. Thanks!