Forum Archive Index - December 2001

["winner69 ." <wwinner69@hotmail.com>]

Further to my post re what might happen in the future some more support for 
a likely downturn in the markets comes from man in charge of Global Asset 
Management (in today's Sunday Star Times) -

"....world markets could increase another 15% into early next year, but 
could fall as much as 40% after that as the reality of recession finally hit 
home"

So that man is undecided but he obviously wouldn't be surprised if the 
markets fell by 40%

Capitalist - your husband dismisses the idea of a long bear market as 
nonsense because he believes a recovery will come sooner than expected.

I presume he is talking about an economic recovery. No doubt a world  
economic recovery will happen soon, probably late next year. The US economy, 
for instance, will probably grow and at a good rate for the next decade.

What we do tend to overlook is we can have a long term bear market while the 
economy is still growing. For instance during the 1970's (a bear market) GNP 
per capita increased by 24%.

The markets decline because investor's willingness to pay excessive earnings 
multiples will wane.

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