With stocks still tumbling and earnings declining, the stock watcher's game of calling a bottom has become a cruel joke. The first three months of 2001 made up one of Wall Street's worst quarters in decades. Numerous companies were cut in half and bargain hunting has barely begun. Analysts say investors are either running for the exits or waiting for equities to get even cheaper. Even though stock prices are low, investors don't feel they are low enough.
Market psychology makes stocks more attractive when prices are high and less so when they fall.
People tend to expect recent performance to continue indefinitely. This tendency also tempts stockholders to load up the truck at all-time highs and dump everything in bear markets. An impending recession also has some worried about global ramifications. Mr. Greenspan is still regularly criticized for fueling the downturn by ratcheting up interest rates through last year. Now observers expect the Fed to make more cuts in the near future to pump more liquidity into the American economy.