回顾一下历史, Now is NOT 89-90年, Bear is staring at us

I respectfully disagree with the analogy of CURRENT situation mkt to 89-90.

Yes, there are many similarities, as 老周 said:
1. Housing slump
2. Japanese was coming big time (much bigger than Chinese is coming now).
3. Negative cover stories about housing slump everywhere.
4. A high level of indebtedness

But there are huge critical difference:

1. S&P P/E is MUCH higher than 1990, most importantly, profit margins are at the highest level in history, if margin contact, p/e will increase quickly
http://www.hussman.net/wmc/wmc070820.htm

2. Unemployment rate reached 7.8% in 1992,currently at 4.7% only.Some of you have use this as a postive for current mkt, but on the contrary, this is a negative, since it is already low, which direction it will go? more probably, higher!

3. 30-YR fixed mortgage rate was at 10%, current 30-YR fixed rate is around 6.5%, again, this is not a postive for current mkt, but on the contrary, this is a negative, since it is already low, which direction it will go more probalbly, that's higher. Histort has proved that when interest rate is high, usually people are pessimistic, mkt are cheap, subsequent reture will be higher, when things are good, rate is low, mkt are expensice, and subsequent reture is lower.

4. Market is really not pessimistic enough, NAZ still near 5 yr high, people are chasing GOOG, AAPL, RIMM like they chase YHOO, AMZN, QCOM IN 2000, sure, everYthing related to consumer are crushed.

5. Just look at Emerging mkt / Europe, they had beem on a bull run for over 5 yrs (10/2/02), this is the LONGEST BULL MKT withou a sizable correction EVER, do you think this looks like a bottom rather than top? Will the Aug 07 mini crash trigger a new bull mkt, I just don't think so,

Now is NOT 89-90年, All parties must end, the craziness of the HK /China mkt maybe already signal the top, BUBBLE ARE THE MOST BEAUTIFUL BEFORE BURSTING but it could still run for a bit with favorable seasonaltiy

Just as the complacent credit market turn sour in such a quick time in June, the 2002-2007 great global bull run could turn quickly as well.

Bear is staring at us right now, just don;t know when he comes out with full force...........

所有跟帖： 

• Ren Zhe Jian Ren, Zhi Zhe Jian Zhi. -6grizzly- ♂ (188 bytes) () 11/07/2007 postreply 21:00:24

• Thanks for sharing! -HappyQueen- ♀ (0 bytes) () 11/07/2007 postreply 21:29:56

• My answers: -dividend_growth- ♀ (473 bytes) () 11/07/2007 postreply 21:40:09

• if it drop 20%, then I will pile in as well -SZHOU888- ♂ (61 bytes) () 11/08/2007 postreply 05:59:55

• Absolutely! If the market is going to drop, -dividend_growth- ♀ (32 bytes) () 11/08/2007 postreply 11:29:24

• 最大的问题是现在没人要美元。釜底抽薪那！ -yogiho- ♂ (0 bytes) () 11/07/2007 postreply 22:20:27

• 谢分享。你说的没错，短期确实可能更坏，尤其是金融股。但我的意思是长期看 -老周- ♂ (277 bytes) () 11/08/2007 postreply 06:47:19

• Forgot to say for HK/Chinese stock markets, it is a DIFFERENT st -老周- ♂ (22 bytes) () 11/08/2007 postreply 06:48:35

• Agree, in the long run, sky not falling, time to buy U.S. Consum -SZHOU888- ♂ (54 bytes) () 11/08/2007 postreply 07:15:09