[Eug]

The end of the bull market

So warns investment newsletter writer Dennis Gartman on Friday, saying the massive plunge in equities in the past 24 hours “dwarfs anything seen previously,” and is far more severe than the crash of 1987 or the emerging markets-Russian collapse of several summers ago.

He is rejecting any talk on the Street that this weakness a mere correction in the context of a global bull market. “It is not merely a correction. It is the signal of the end of the global bull market that began several years ago, and before this near bear market is done, we are likely to see share prices materially ... indeed very materially ... lower.”

Don’t be surprised, he predicts, to see bellwether stocks that led the market higher trade down 50 to 60 per cent from their highs “before this has run its course, for that is the nature of bear market.”

I'm not sure I share his pessimism, but I also think we shouldn't be surprised if that this correction might be somewhat more severe than what some of the very optimistic analysts are predicting.

It's kind of moot though for me since I pulled a whole bunch of stock out a few weeks ago already anyway.

And there's always AAPL. They seem to be partially immune to market forces of late. In fact they're now worth more than HP in market cap. (Carly, what did you do?!? ) This surprises me, because I still think AAPL is overvalued. But then again, I've been saying that for quite some time now, and AAPL still keeps moving higher. It might just hit $150 next week (and then pull back a bit as people take profits).

[turtle777]

This thread is so jacked, on the hampstors side. Black background, layout all screwed...

What's up with that ?

-t

[Eug]

Originally Posted by turtle777 

This thread is so jacked, on the hampstors side. Black background, layout all screwed...

What's up with that ?

-t

If you're being serious, please provide a screengrab. Looks fine here.

I don't see any hamsters either. Just some bulls and bears. And a turtle. And part of a cow.

[Dakarʒ]

Ditto.

[wallinbl]

It's a little early to be calling anything. Get real.

[turtle777]

Originally Posted by Eug 

If you're being serious, please provide a screengrab. Looks fine here.

-t

[Eug]

Weird. It doesn't look anything like that here. It almost looks like your page hasn't finished loading yet.

WTH is a "hampstors side" anyway?

[turtle777]

Originally Posted by Eug 

WTH is a "hampstors side" anyway?

Server, dude.

-t

[Eug]

July 27, 2007 close:

Dow Jones -208.10 13,265.47
S&P 500 -23.71 1,458.95
Nasdaq -37.10 2,562.24
S&P/TSX -96.07 13,748.53
Hang Seng -641.28 22570.41
FTSE 100 -36.00 6215.2
Dax -114.24 7692.55
Nikkei -418.28 17283.81

Bloomberg: S&P 500 Posts Worst Week In 5 Years

"The bubble has been in private equity from the cheap financing and when the bubble bursts, there is going to be pain," said Tom Wirth, who manages $1.8 billion as senior investment officer at Chemung Canal Trust in Elmira, New York. "There'll be continued volatility and downside pressure for the market."

The S&P 500 lost 23.71, or 1.6 percent, to 1458.95. The Dow Jones Industrial Average retreated 208.10, or 1.5 percent, to 13,265.47. The Nasdaq Composite Index slipped 37.1, or 1.4 percent, to 2562.24.

The S&P 500 lost 4.9 percent in the week, its biggest weekly plunge since 2002, and the Dow average declined 4.2 percent, the steepest drop since March 2003. About $2 trillion of global stock market value was wiped out this week, according to data compiled by Bloomberg.

European stocks had their biggest weekly retreat in almost five months. Benchmark indexes also dropped in Brazil, Japan, Hong Kong and Canada.

The stocks are unlikely to bounce back because funds for leveraged buyouts are drying up, said Jonathan Monk, who oversees $1.3 billion of U.S. equities at Aerion Fund Management in London.

"For the time being, takeover speculation is not going to be sending U.S. stocks higher," said Monk.

[Stogieman]

Turtle are what browser are you using? I'm at work using IE 6. I'm seeing the same messed up page as you.

[Rumor]

This thread has been hampstornated.

[Rumor]

Originally Posted by Stogieman 

Turtle are what browser are you using? I'm at work using IE 6. I'm seeing the same messed up page as you.

Same here. This particular thread is not IE 6 friendly.

Now if more sites could be like this, maybe people would stop using this shitty browser*.

*At work I have no option.

[Big Mac]

Right now it's just an overdue correction. Whenever we have one we hear analysts saying the sky is falling. We had a similar correction last year, which was completely forgotten about when the Bull ran 1600 some odd points thereafter. We'll see what happens.

[Rumor]

Will my tinfoil hat protect me from the falling chunks of sky?

[MindFad]

Originally Posted by Rumor 

Will my tinfoil hat protect me from the falling chunks of sky?

Fun Fact: According to a Modern Marvels episode, there has actually never been household cooking/wrapping foil (also known as aluminum foil) made from tin. It has always and only been made from aluminum. This is what the TV tells me anyway. Yay for History Channel.

But it would suck saying "Will my aluminum foil hat...." Tinfoil works much better. Carry on.

[Eug]

Works fine in Safari and Firefox in OS X, and Firefox in Windows.

Is this the only thread that screws up in Windows IE 6? If so, that's strange, and feedback worthy.

[bradoesch]

Just curious Eug, why do you feel AAPL is overvalued?

[Eug]

Sure Apple has had a great run, and still will innovate, but unfortunately it's not as if Apple will necessarily grow at this rate forever. The iPod is becoming saturated, and it seems Apple has bet the farm on the iPhone. If it succeeds, that's great, but if it doesn't continually hit a home run with it then investors are gonna jump. We've already seen that happen when the initial AT&T numbers weren't astronomically high. AAPL dropped 4% in one day because of that... and then went back up again later.

Perhaps overvalued isn't the best term. Let's just say that Apple is going to be quite volatile. Furthermore, while Macs and iPods and iPhones are great, it seems to me that Apple simply doesn't have the depth of companies like IBM. Do you really think Apple deserves to be worth 3/4 the value of IBM?

But like I said, despite this, AAPL has continued to do very well. Even if I turn out to be right (and I may be very well be totally wrong), it can't hurt to ride the wave. The key is just to know when to bail, if necessary.

P.S. Is Apple every gonna pay dividends?

[Chuckit]

Originally Posted by Eug 

Perhaps overvalued isn't the best term. Let's just say that Apple is going to be quite volatile. Furthermore, while Macs and iPods and iPhones are great, it seems to me that Apple simply doesn't have the depth of companies like IBM. Do you really think Apple deserves to be worth 3/4 the value of IBM?

Given the companies' relative directions, perhaps. Apple is consistently outdoing itself every quarter, while IBM seems to be kind of treading water.

[OldManMac]

Originally Posted by Eug 

Sure Apple has had a great run, and still will innovate, but unfortunately it's not as if Apple will necessarily grow at this rate forever. The iPod is becoming saturated, and it seems Apple has bet the farm on the iPhone. If it succeeds, that's great, but if it doesn't continually hit a home run with it then investors are gonna jump. We've already seen that happen when the initial AT&T numbers weren't astronomically high. AAPL dropped 4% in one day because of that... and then went back up again later.

Perhaps overvalued isn't the best term. Let's just say that Apple is going to be quite volatile. Furthermore, while Macs and iPods and iPhones are great, it seems to me that Apple simply doesn't have the depth of companies like IBM. Do you really think Apple deserves to be worth 3/4 the value of IBM?

But like I said, despite this, AAPL has continued to do very well. Even if I turn out to be right (and I may be very well be totally wrong), it can't hurt to ride the wave. The key is just to know when to bail, if necessary.

P.S. Is Apple every gonna pay dividends?

Apple didn't "bet the farm" on the iPhone. Their latest quarterly results also show a record number of Mac sales. They also still managed to sell almost 10 million iPods, which, if annualized, would be close to 40 million units (I realize that's not an exact way of extrapolating the sales out, but it still shows strong iPod sales). I'm certain they're not just sitting around, resting on their laurels, with a new iMac rumored to be coming soon as well. They're a lot deeper than some like to think.

[Powerbook]

Originally Posted by Chuckit 

Given the companies' relative directions, perhaps. Apple is consistently outdoing itself every quarter, while IBM seems to be kind of treading water.

Well, that's not entirely true. But the chances are nowadays, quarters will be strong.

PB.


Quartal Umsatz Nettogewinn/-verlust
1/00 2.340 Mio. 183 Mio.
2/00 1.940 Mio. 233 Mio.
3/00 1.820 Mio. 203 Mio.
4/00 1.870 Mio. 170 Mio.
1/01 1.000 Mio. -195 Mio.
2/01 1.430 Mio. 40 Mio.
3/01 1.480 Mio. 61 Mio.
4/01 1.450 Mio. 66 Mio.
1/02 1.380 Mio. 38 Mio.
2/02 1.500 Mio. 40 Mio.
3/02 1.430 Mio. 32 Mio.
4/02 1.440 Mio. -45 Mio.
1/03 1.470 Mio. -8 Mio.
2/03 1.475 Mio. 14 Mio.
3/03 1.545 Mio. 19 Mio.
4/03 1.715 Mio. 44 Mio.
1/04 2.006 Mio. 63 Mio.
2/04 1.909 Mio. 46 Mio.
3/04 2.014 Mio. 61 Mio.
4/04 2.350 Mio. 106 Mio.
1/05 3.490 Mio. 295 Mio.
2/05 3.240 Mio. 290 Mio.
3/05 3.520 Mio. 320 Mio.
4/05 3.680 Mio. 430 Mio.
1/06 5.749 Mio. 565 Mio.
2/06 4.360 Mio. 410 Mio.
3/06 4.370 Mio. 472 Mio.
4/06 4.837 Mio. 546 Mio.
1/07 7.115 Mio. 1.004 Mio.
2/07 5.264 Mio. 770 Mio.
3/07 5.410 Mio. 818 Mio.

[bradoesch]

Originally Posted by Eug 

Sure Apple has had a great run, and still will innovate, but unfortunately it's not as if Apple will necessarily grow at this rate forever. The iPod is becoming saturated, and it seems Apple has bet the farm on the iPhone. If it succeeds, that's great, but if it doesn't continually hit a home run with it then investors are gonna jump. We've already seen that happen when the initial AT&T numbers weren't astronomically high. AAPL dropped 4% in one day because of that... and then went back up again later.

Perhaps overvalued isn't the best term. Let's just say that Apple is going to be quite volatile. Furthermore, while Macs and iPods and iPhones are great, it seems to me that Apple simply doesn't have the depth of companies like IBM. Do you really think Apple deserves to be worth 3/4 the value of IBM?

But like I said, despite this, AAPL has continued to do very well. Even if I turn out to be right (and I may be very well be totally wrong), it can't hurt to ride the wave. The key is just to know when to bail, if necessary.

P.S. Is Apple every gonna pay dividends?

I can see where you're coming from, after this big run and Apple now sporting a p/e in line with its growth.

I do think Apple deserves to be worth 3/4 of IBM. I will gladly pay a premium for Apple shares over IBM. In five years time I want to be the guy that owned Apple. It's all about earnings growth.

I doubt Apple is going to pay dividends again any time soon. I'm not sure why Apple is hoarding all that cash, but normally they would reinvest it into themselves (which would include a share buyback program) to bring a better value to the shareholders than paying a dividend. I'm curious what they have in mind for that cash

[Eug]

July 31, 2007:

AAPL: Down 9.67, closed at 131.76

S&P/TSX : Up 3.91, closed at 13868.63
DJIA Down: Down 146.32, closed at 13211.99
S&P 500: Down 18.64, closed at 1455.27
Nasdaq: Down 37.01, closed at 2546.27

[Eug]

Originally Posted by Eug 

July 27, 2007 close:

Dow Jones -208.10 13,265.47
S&P 500 -23.71 1,458.95
Nasdaq -37.10 2,562.24
S&P/TSX -96.07 13,748.53
Hang Seng -641.28 22570.41
FTSE 100 -36.00 6215.2
Dax -114.24 7692.55
Nikkei -418.28 17283.81

Not a good week for either AAPL or the market in general.

AAPL: $131.85
One week ago it was $143.85. That's a drop of $12, or 8.3%.

Dow Jones -83.56 13181.91 (Down 0.6%)
S&P 500 -25.89 1433.06 (Down 1.8%)
Nasdaq -50.99 2,511.25 (Down 2.0%)
S&P/TSX -183.29 13,565.24 (Down 1.3%)
Hang Seng -31.97 22538.44 (Down 0.1%)
FTSE 100 +92.00 6307.2 (Up 1.5%)
Dax -256.88 7435.67 (Down 3.3%)
Nikkei -303.95 16979.86 (Down 1.8%)

And note that last week's close was after the S&P 500's worst week in 5 years.

[wallinbl]

Why does everyone have to react so strongly to everything? The market is fine. The changes with regard to lending and credit were overdue and well needed. No need to get your panties in a wad - we're going to be better off for this having happened - had the excessively liberal credit continued, there could have been a monster crash.

[Eug]

Originally Posted by wallinbl 

Why does everyone have to react so strongly to everything? The market is fine. The changes with regard to lending and credit were overdue and well needed. No need to get your panties in a wad - we're going to be better off for this having happened - had the excessively liberal credit continued, there could have been a monster crash.

Well, the reason I posted this thread was because some are predicting a monster crash anyway (albeit perhaps a more gradual "crash"). I don't quite agree, but I also think those who say "Don't worry, it's just gonna be a minor overdue correction" might be a little too optimistic.

ie. I think it could be more than the <10% which some optimists are predicting, but less than the 50% that a few pessimists are predicting.

[Eug]

Originally Posted by Eug 

I think it could be more than the <10% which some optimists are predicting, but less than the 50% that a few pessimists are predicting.

The S&P/TSX is now down from 14646.82 on July 19 to 13048.76 today - down 10.9%.
The Dow is now down from 14000.41 on July 19 to 12861.47 today - down 8.1%.
The S&P 500 is now down from 1553.08 on July 19 to 1406.7 today - down 9.4%.
The Nasdaq is now down from 2724.74 on July 19 to 2520.39 today - down 7.5%.

The Canadian market has already surpassed that 10% loss mark. The US market is very close.

As for AAPL, today it is 119.90, down from a peak of 148.92 - down 19.5%. (!)

[Powerbook]

Originally Posted by wallinbl 

Why does everyone have to react so strongly to everything? The market is fine. The changes with regard to lending and credit were overdue and well needed. No need to get your panties in a wad - we're going to be better off for this having happened - had the excessively liberal credit continued, there could have been a monster crash.

Yeah what can you do when 100 million idiot lemmings run in one direction? You can't stop them by just holding up some sign of reason...

PB.

[Eug]

Well, that's kinda the point. The market is not completely fine precisely because much of the market was driven up by emotional and fairweather investors. These same investors are partially responsible for the recent downturn in the market.

The question now is whether it goes sideways like it has been for the last little while, or if it continues to drop like many analysts are saying, or if it will slowly climb like the optimists are saying. It is interesting though to see the fewer numbers of optimistic analysts there have been in the last little while.