No. of Recommendations: 2
Hi badsin,

I think that Bill is right in what he says. In January I started a couple of pseudo portfolios here and everyone thought that I was either nuts or very brave staring it in such a market and I got several emails to that effect.

The reason is that most of us are psychologically conditioned by the immediate past and the markets had been horrible for 3 years. Now 4 months later the markets have somewhat recovered and some individual stocks are up over 50% (Home Depot for example). Now that they are going up our fear of them going down further recedes and greed takes over as in "I don't want to miss the next bus"

The market does not need better psychology to sustain the upward move as that very same psychology will cause the market rally to collapse. Not to the extent of the 1999/2000 bubble but it will collapse nonetheless.

Over the long term, Bill Mann is a long term investor not short term trader, the market needs higher earnings and FCF to justify the current P/E's on many many stocks. higher earnings will either reduce the P/E's or move the stock market up in anticipation of further earnings increases. Without them many of the fools buying today will be diappointed. So yes we need better valuations


Philip who was buying in the first quarter but not now.
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