The completion of the
mid-year correction is over. Those in the bearish camp must
be pretty unhappy
at this juncture because as usual the news media hopped all over the
So, what are the key factors of a Bear Market?
Do we really need to sweat the load?
Tight Money isn't there.
The fed is expected to further ease interest rates at the beginning of
monetary base needs to be expanded.
My Guru would like to see the Fed
become more proactive to stimulate economic growth, which is lagging.
Short term rates should reduce in the first half of next
Inflation expectations are expected to remain low.
energy prices have reduced consumer discretionary spending, keeping the
inflation lid on.
Not there either.
Third Quarter real GDP in an advance report has slowed to an annual
rate of 1.6%.
My Guru expects real GDP growth to
average between 1.5 - 2.5 % in 2007.
The market is
reasonably valued base on the critical variables of inflation and
The S&P 500 index has a PE of 15.7 or so
and in 2007 is expected to trade in a range of 16 to 16.5%
Bear Market Summary:
Bear Market in the near future. Remain fully invested.
Timing Portfolio Changes:
No Portfolio Changes
Bought a little stock:
OC - Owens Corning
USG - US Gypsum
- DR Horton
Sold what was left of the Muhlenkamp fund and am
buying the Hodges Fund (HPMAX)