Have Economic Fundamentals Really Changed?

Gailliot, Henry
February 1996
Journal of Financial Planning;Feb1996, Vol. 9 Issue 1, p54
Academic Journal
The article focuses on investment economics. Anyone who was an investor in 1980,1972, or 1968 cannot possibly look at what is happening today without understanding what it is. What is unclear is what the trigger will be, when, and under what circumstances. There was no obvious trigger for oil, for the company Nifty Fifty, or for technology at the time. In hindsight, it was perfectly clear that this bubble had to burst. Today it is obvious to 99 percent of the participants that 6000 Dow is a chip shot for 1996. A forecast of 10,000 on the Dow without an intervening bear market does not even get one a headline in a investment magazine because too many people are making the forecast. The P/Es on the billion-dollar-cap concept companies have reached levels that have never been seen in this country. Netscape sells at 450 times its next year's earnings and it is a multi-billion dollar company. In the prior bubbles, 100-plus prospective earnings seem to be about where people stopped.


Related Articles

  • Constructing the Core of Your Portfolio: Consistency and cheapness should be your watchwords. Stevens, Sue // Morningstar Practical Finance;Apr2007, Vol. 3 Issue 4, p1 

    The article provides information on the significance of constructing the core of the portfolio in the U.S. It is recommended to focus on a few funds that can answer what is needed and them to the amount that is invested. It is necessary to look for performance to be ranked in the top 25 percent...

  • A Super Bear Is Upon Us. Markowski, Michael // Equities;Dec2008, Vol. 57 Issue 8, p29 

    The author characterized the U.S. economy as a super or secular bear market. He believes that this market started on October 9, 2007. He points out that this was a sign that equities and mutual funds would perform in a mediocre manner in a span of eight to 20 years. He forecasts that major...

  • Investor confidence index takes record fall. Taylor, Mike // Money Management;10/30/2008, Vol. 22 Issue 41, p4 

    The article reports on the investor confidence index of investors worldwide. The State Street Investor Confidence Index in North America has decreased in October 2008. Investors in Europe and in Asia also revealed the decreased investor confidence index. This index reflects the economic events...

  • Filtering out all the noise. Shaw, Stuart J. // Inside Tucson Business;11/12/2007, Vol. 17 Issue 22, p22 

    The article focuses on the importance of using the Company Stock Risk Profile as an investment tool to simplify the process of analyzing securities for individual investors. The author emphasizes that such tool enables him to quickly and easily screen Dow stocks and search stocks of Boeing,...

  • Political disputes hold back Kuwait. Salisbury, Peter // MEED: Middle East Economic Digest;1/16/2009, Vol. 53 Issue 3, p18 

    The article focuses on the last-minute cancellation by Kuwait's Supreme Petroleum Council (SPC) of the K-Dow deal, a joint venture between the U.S.-based Dow Chemical and Kuwait's Petrochemical Industries Co. The decision came after parliamentary opponents claimed that the deal was poor value...

  • From confidence to caution. Berube, Gerard // CA Magazine;Dec2003, Vol. 136 Issue 10, p5 

    Comments on economic trends underlying the investment scene in Canada. Key difference between the collapse of technology stocks in 2000 and the explosion of real estate prices in 2003; Attitude taken by investors during the 2003 period; Potential implications of monetary conditions for economic...

  • I Will Survive. Hobson, Mellody // Black Enterprise;Apr2009, Vol. 39 Issue 9, p26 

    The article differentiates between a bear market and a market crash, and offers suggestions on how survive in both cases. A bear market is a prolonged, substantial downturn, while a crash is a similar fall, but within a few days. To maneuver a bear market, investors need to remain rational and...

  • BEWARE THE DREADED "R" WORD. Sloan, Allan // Fortune International (Europe);12/24/2007, Vol. 156 Issue 12, p43 

    The article asserts that investing success does not depend on whether the economy goes into recession. Recessions are identified only in hindsight. Recessions that conform to the commonly accepted definition of that term can be verified only months after the fact. Focusing on a recession is...

  • Return of hot money. Gray, Simon // International Money Marketing;Apr2004, p19 

    Suggests that investors in Asia who experienced the financial and economic crisis in the late 1990s, are being lured back by stellar returns and low valuations in 2004. Growing hype surrounding the Chinese market and the excitement about soaring economic growth in countries across the region;...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics