The best thing I can say about today's Market Action is Volume was -14%
below average.

This morning I was reading Warren Buffet's annual letter to his
shareholders.  (Yeah, I wish!  No, it was on Fortune's website.)  It's
old news from last fall, but he said he wasn't inclined to invest in
stocks because they weren't "cheap".  He didn't say what he based that
opinion on.  Prices are at about those levels again.  I've been seeing
others comparing the total value of the NYSE and GDP, roughly equal now
after having been closer to twice during the Bubble, and well below
historically.  Historical PE's are also often quoted.  What measure of
"valuation" one uses depends a lot on what axe one is grinding.

The first caveat is that Buffett is a notorious Value Investor.  He
likes to buy stocks trading at deep discounts to their real value.  I
wonder if he'd be happier of the Market were off another -20% from
current prices?  I don't think I want to see the consequences of Market
Prices falling significantly from here.

Now, the most famous four words uttered at a stock broker's office are
"this time it's different."  We heard that a lot during the Bubble.
We're right to be skeptical, very skeptical.  But I think those who
insist things are "right" only when they follow historical norms are
making a big mistake.  Things HAVE changed and we have to adapt.  Much
of the 1998 Asian Monetary Crisis was due to advanced technology for
trading, settling, and transferring money around the globe gave
arbitrageuers a jump on backward national treasuries.

Total value of the stocks, eh?  Now, would you be including Glaxo-
Welcome (GSK), Nokia (NOK), Vimpel Communications (VIP), Huaneng Power
(HNP), etc.?  Foreign corporations all!  They trade on the NYSE just
like Coke (KO), which by the way does HOW MUCH of its business overseas?
And is Stanley Tool an American company or Bermudan?  The NYSE is the
prestige stock exchange where the world's top companies want to be
listed.  And it isn't just that these stock values distort the flow of
money going through the NYSE, it's the way globalization and free trade
has tied us into an international economy.

I have no idea what "Fair Value" might be, and I'm a little skeptical of
using the "Efficient Market" hypothesis.  What I do believe is that
anybody who tries to demonstrate it by a simple comparison is either
stupid or duplicitous.  Or both.

Price     Vola-     Momen-    Volume    Oscil-    Summ.
Change    tility    tum                 lator     Index
 -__+      -__+      -__+      -__+      -__+      -__+

 __|_      _      __|_     02/25
 _<__      <___      _|__      _<__      __|_      __|_     02/26
 __<_      <___      _|__      _<__      __|_      __|_     02/27
 __>_      _      __|_     02/28
 _|__      _     03/03

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: SELL       Date:  01/17/03 S&P:    902
Winner or Loser:  Loser                 By:     -7

See my market tracking charts for '01-'02 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.angelfire.com/or/paulrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html

                                                   



... Computer dating sucks.  I'm switching back to women.
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