[sinkspur]

Pupulva has nothing but a gloomy outlook. Methinks he must be a Bengals fan.

Short, short, short.

Doom and gloom, gloom and doom.

Pupulva will probably lose his ass when the market turns around; he's got his nose buried in shorts and gold.

[arete]

Doom and gloom, gloom and doom.

It is tough being the guy who points out problems to people who don't want to know about them, or more importantly, deal with the problems. It is so much easier to not have to worry.

Richard W.

[1stMarylandRegiment]

Actually, the guy has a point. There is a real, if remote, risk of a debt deflation economy-wide. Right now debt deflation is limited to the Telecommunication, Media and Technology industries (WorldCom, Adelphia, Winstar); it is emerging in the Merchant Energy (used to be electric utility) companies (Enron- TXU); probably coming to your state and locality (downgrade of North Carolia GO's from AAA; Kalifornia is about $25BBN in the hole). Don't even say auto company to me.

OK, sarcasm off. This is a bear market, and it aint over yet. Deal with it. At these price levels there isn't as much risk as there was at S&P 1527, but there is still potentially 300 - 400 points in a capitulation, or years of up and down like the 70's, before another bull market.

At least I'll still be in the business if I survive the bear - and I can tell my grandkids I was in the business when . . .

The only answer is for the FED to reflate and lower the dollar cost of repaying the debt.

Look at industrial commodities, presently emerging from a 24 year bear market, (gold LOSES price but retains value in a deflation - current run-up is NOT just war risk and Central Bank sales abatement) and tell me you don't smell a whiff of inflation in the air.

If you are a defensive investor and you invest in stocks, look for real cash-on-cash earnings; low debt to capital; market leadership; consumption products; rising dividend history and relatively low price-book. There are about six of these companies available with a 25% margin of safety in the S&P 100 (first-quality companies; smaller S&P 400 are second quality). You need about 40 to be well diversified. If you can't find them, take each remaining 2.5% of your investment fund and own laddered T-Notes - hold them and roll them until prices of first-quality companies decline to prices including a margin of safety.

Re-read Benjamin Graham.

Other than that I'm very positive until Jan 10th.