11/23/02
Hi,

It seems to me we are in a trading range from 7250 to 9200 for the time being. We could go as high as 9800 though I would say this is highly unlikely. Should we drop below 7250, we are back heading towards 6000 and lower.

My original view was that the bottom - 6000 or less for the Dow and 1000 or less for the NASDAQ - would be by April 30, 2003. It seems that this has been postponed back maybe until July or August 2003. Every day there are more layoffs, still. Yesterday GE announced that it had to shore up its capital in GE Capital and earnings would miss in 2002 & 2003 - and it went up!

I continue to believe that there will be massive bankruptcies in all of the high debt industries: airlines, cable TV, telecoms, etc... Ultimately the bondholders will own the companies and the debt eliminated. This washout phase will take many, many years.

The ecomomy still does not appear to be any stronger. Housing prices at the highs and rents are starting to decline in New York, Los Angeles and elsewhere. Does this foretell a top and subsequent drop in real estate prices? I do not know, yet. It is too early to tell.

Continue to pay down debt - and if you haven't bought gold stocks yet, buy them now. Gold and precious metals stocks should comprise no more than 20% of your total portfolio.

If you still own other stocks, please place a trailing stop loss, so you will salvage most of your money in the event stock prices are still heading lower.

- Arnold

Copyright 2002, Arnold's Ramblings, Inc. All Rights Reserved.
- posted by Arnold @ Saturday, November 23, 2002