Word: dowe
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...stocks are finally near the bottom, which is the emerging consensus, a lot of market truisms fall neatly into place. Sure enough, in the end bear markets leave no places to hide. "Safe" havens like Coca-Cola and Philip Morris crashed more than 20% as the Dow plunged in June and July. Sure enough too, the collective wisdom of the market understands recessions better than the economists. Last week's revised figures show the economy contracted in not just one but three quarters last year. That deep pullback helps explain why the market began tanking in 2000, when economists were...
...really do sell when we should buy: more than $30 billion flowed out of stock funds in July, the biggest one-month exodus since the 1987 crash. Selling stocks when prices are so low is "insane," says Morgan Stanley global strategist Barton Biggs. That scared money missed the Dow's 1,000-point rebound...
Throw in unusually high levels of short selling (a bet that stocks will fall) and frenzied institutional selling that drove the Dow to its closing low of 7702 on July 23, and you have a classic snapshot of how bear markets are supposed to end. Some market gurus now say the average stock is undervalued by 20% or more. Even if the major indexes haven't hit rock bottom, individually "many companies likely have hit their low," says Donald Straszheim of the economics firm Straszheim Global Advisors...
...analysts don't always get it right, of course, and many stuck far too long with stocks that plunged. This could be yet another false bottom. Three times since the Dow's descent began in January 2000 the market appeared ready to turn higher, only to suck in investors and saddle them with more losses. And a bottom does not signal an uninterrupted ride to higher ground. "After 20 years of a bull market, the bottoming process could take a long time," cautions Wallace Weitz, manager of Weitz Value fund. "The Dow could trade in this range...
...anyone from those Midland days is to blame Wall Street. Bush remains distrustful and not a little dismissive of the investment bankers who swooped into Texas with saddlebags full of cash when oil prices gushed but galloped out of town when prices sank. Back in April, when the Dow hovered around 10,000, a White House economic adviser told the President at a social gathering that "there's no reason this market shouldn't be around 7500." According to an eyewitness, Bush made a face, turned and walked away, as if the subject bored or annoyed him. Last week Bush...