Good point re Interest rate, Wizzo.
We are in a very new stage of our economic development--low GDP growth with low inflation. Typical economic downturns couple low GDP growth/contraction with high inflation. Also, there is currently a real estate bubble and this is functioning as a brake against a quick exodus of capital from the stock market. My question is, after all these "special circumstances" play themselves out, will we following traditional economic patterns [1929 and 1973--see the PE and S&P levels above] or will there be a "soft landing" to DOW 7000?
I'm putting my bet on hedge funds and gold at least for 3 years.
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Originally posted by Wizzo
The average P/E is still a bit high, we will likely see dow7500, maybe even 7000, but that's about it.
There's a number of factors besides P/E that account for the market's grow or decline. Interest and Inflation being just two of them which both are well in check. In fact, those two factors are more important in today's non-gold standard economy than any other time in history.
We will be launching a full on attack on Iraq fairly soon and a good foriegn war always helps boosts a economy.
And hopefully, alot of these idiodic "75k a year mutual fund managing morons" will go back to doing the books for their local Burgerking, instead of making really bad choices with billions of dollars. And Intitutional Investing will return to the boring stable force it was until about 5 years ago, when any moron with a BS could become a fund manager!
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