Wednesday, December 07, 2005

When will S&P hit 900?

Call me a permabear but I'm hoping to see S&P go below 900 or at least 1000 soon. I was one of those who got out way too early (around 1075, Aug 2004) and I've been waiting to get in. The cyclical bull started in March 2003 (800) and as per Bob Brinker the cyclical cycles last on average 1 to 3 years. But this bull seems to be going stronger and stronger and seems it will last over 3 years. I should've just stayed in the market..but after seeing much red since 2000, I was happy to see my numbers back in black and thought I shouldn't get greedy and got out in Aug 2004.

Considering the long time horizon, I should've stuck to the basics and stayed in equity. I am surprised at how S&P P/E continues to remain low (16) -- its all about outstanding growth in earnings. I guess the enormous cost savings and productivity boost (due to technology, world flattening) could be the basic driving force. Anyway its hard if not impossible to predict the future; I'm looking for an opportunity to get back into the market. And stay put for a really long time. It is not that nice a feeling to be out of the market and see it go up and up (was that 1263 recently?).

I was lucky to learn the bubble lessons just by watching CNBC in 2000.
That permanently pushed me into indices and never run behind individual stocks. The lesson didn't cost me financially; but this premature exit is costing me terms of lost time. I'm just wishing the end of this cyclical bull sooner than later so that I can just get in and not think about getting out.


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