Wednesday, 10/9, Market WrapUp (Derivative model breakdown?)

Financial Sense Online ^ | 10/9/2002 | James J. Puplava

[Mute]

Today Abbey Joseph Cohen lowered her Dow expectations from 11,300 to 10,800. What world do these people live in?

Ed Yardeni is the Chief Investment Strategist at Prudential. He says that the stock market is 49% undervalued as of today's close. That puts fair value for the S&P around 1520, and the Dow around 14,300.

I think his model may need some tweaking.

[#3Fan]

I get FreepMail from many people that say they read the Market WrapUp but do not post. It's true that the Bulls have gone into hiding but I ping over 70 people every night for this post. I think most of them read it... Some don't post because they think that they don't "have enough knowledge." They don't know that we are all hacks...(laughing)

:^)

[blam]

" Some of mine were purchased in the 60s & 70s."

I built it in 91 to retire in but changed my mind.

My son bought two houses in Glendora, Ca this year, what do you think of that?

[clippedwings]

I have been following The Nightly Commentary and Stock Signals from The Pitbull Investor
http://www.pitbull.com

Seems to work well over the years.. they also have a stock market crash index

[the rifleman]

I read them every night, and I'm usually speachless by the end. Course I'm just a hack too and I know it so I just keep my mouth shut. I'll sit in the back, I'm here to learn.

I do feel much safer than the average joe that I work with in that I pulled my money out of the market early (December 99) and started investing in PM's in 98 and 99 when they were cheap. I just knew Toon was up to no good.

[steveegg]

In some markets that will be true but then again it depends on when you purchased the property. Some of mine were purchased in the 60s & 70s. I would not sell my home here for to many reasons to list.

Points taken. It'll be the Johnny-come-latelys that will feel the big heat (as is always the case).

As long as those rental properties make you money (and don't cause you to tear your hair out every time some dome mick tenant confuses the kitchen with the bathroom), they're a good investment.

As for your home, again, I can't argue. It's hard enough to find a good one without worrying whether it'll remain a cash cow. The idiots that see their home as a cash cow are the ones that'll be jammed.

[steveegg]

Methinks that's a slight typo :-) The only thing "under" about this market is how far under today's close will things get.

[#3Fan]

I've noticed that too. I guess if you don't think about it, it will all just go away. But it isn't going to go away. It's just beginning. Toss the upcoming war into the mix.

If the situation with JPMorgan doesn't improve and God willing we get a quick victory in Iraq, I think that the bear trap triggered by lower oil prices post Iraq war will be a good time to get out. I've stayed in with half my 401k since July 2001 hoping for a level market until PEs could slowly lower with increased earnings but it looks like that isn't going to happen with JPMorgan spiraling down. Now I'm forced to wait for a rally that post Iraq war lower oil prices will trigger and hope that JPMorgan survives that long or else take a big hit right now. If JPMorgan levels out post Iraq war then I may stay in. Tough calls coming up.

[steveegg]

That's the trouble with these Market Wrapups; they come out too late to avoid the inevitable typos (no fault of rohry's). That would be dumb, not dome.

[tubebender]

My son bought two houses in Glendora, Ca this year, what do you think of that?

Not knowing the details I can't comment. Are they rentals or does he live in one. In some areas you are forced to go with Section 8 but you get up to 40% more rent guaranteed. I had people tell on every property I bought that I was nuts. :-)

[#3Fan]

I'll bet they still get the hits, just not the comments.

If the Dow ever cracks 9000 again, they'll vent their pent up fury. LOL

[the rifleman]

And to think that Ed was a major doomer over the y2k bug. This guy just lost all credibility.

[hinckley buzzard]

No buying pressure yet, too much complacency, selling by central banks in Switzerland and Germany. Good time to get into gold and mining shares, next week or so, after the next dip.

[blam]

"Not knowing the details I can't comment. Are they rentals or does he live in one. "

Two houses on the same property. He lives in one and rents the other. Not a section 8 area.

[STONEWALLS]

"Today Abbey Joseph Cohen lowered her Dow expectations from 11,300 to 10,800. What world do these people live in?"

apparently not the same world the Japanese live in....the Nikkei's down 263 points[3.08%] as I type this...

as always, thanks Rohry and good luck to everybody!

Stonewalls

[tubebender]

Two houses on the same property. He lives in one and rents the other. Not a section 8 area.

Excellent...now you need to finagle a contract with you and momma to take you in and support you in your "Golden Years". :-)

[StockAyatollah]

These market wrapups don't get the hits they did a couple months ago. I guess everyone's waiting for the market to get back up to 9000 again so they can come back and get cocky like they were before.

With Iraq, NJ election fraud, and the DC sniper not many are paying attention to the bleeding to death of the stock market. Another 200 pt down day. Ho hum. I guess it will take some other financial calamity to wake people up. My guess is that calamity will be real estate bubbles bursting leading to loan defaults leading to bank failures leading to the US looking like Argentina.

[Lunatic Fringe]

What is a 10-sigma event- I tried to search for a definition but could not find one.

[Afronaut]

Yes Sir! Good Luck!!

I predicted 7k Dow and now I and looking for a mid-5k Dow.

Forget Gold.

This should be a wakeup call for people to turn away and change the channel! Game over you loses. 80% of the individual investors do NOT belong in the market. Please don't ask why. This game is cook for a few years. The greater fool is now broke. Foreign cash is gone, and all the cash is now in the renovated downstairs bathroom. Bleak? You better get with the facts folks. Stand and face the smoke. If you could see what I am seeing on the street these days you would know that I am not making up stories here.

Forget 8-10% a year. Look for 2-3% and be happy for your health.

Just because you thought you knew what you were doing means nothing. Forget the Dow, S&P 500. Paint the garage, and take your time.

[blam]

"Excellent...now you need to finagle a contract with you and momma to take you in and support you in your "Golden Years". :-)"

There is no momma (died when he was four) and daddy has his own thang going down here in the Alabama woods, lol.