Newsgroup: it.economia.borsa
Titolo: analisi mercato

allego una analisi uscita su Brief che mi sembra molto interessante (spero
mi perdonino l'infrazione di copyright)
Gianni
Stock Brief
Updated 30-Dec-98
The Enigma of the Market: Conflicting Arguments
No matter how you look at it, the market today is a future chapter
            in the history of the stock market.
            How the chapter ends, however, is yet to be written. The market
is
            an enigma.
            Both Arguments Valid
            The truly interesting thing about this moment in history is that
            contrary arguments for the future direction both have validity.
            Whether we are about to embark on a new era of valuations, or
are
            poised on the brink of an inevitable collapse of a bubble
depends on
            your point of view.
            And both points of view have substantial arguments behind them.
            These should not be entirely surprising however. There are
always
            two sides to a trade. Whenever someone buys a stock, believing
now
            is the time to make money, there is always someone willing to
sell
            the stock, having decided that the money has been made. It is
the
            nature of the market to have two mutually exclusive viewpoints.
            But lately, the debate on both sides has become dramatic, as the
            indices set new highs and stocks doubling or adding 35 points in
a
            single day has become commonplace. And rarely has an argument
for a
            market top occurred at the same time as an argument for a new
            explosive burst of growth.
            Arguments For a Top
            Arguments for the point of view that we are nearing a market top
            have strong fundamental arguments behind them. Most are based
upon
            the assumption that eventually the value of a stock is derived
from
            the value of the underlying business, not perceptions, momentum,
or
            unproven business concepts. The history of the stock market has
            innumerable examples of why this line of thinking is accurate.
            In summary, the argument for an eventual "day-of-reckoning"
includes
            the following points.
                Stock are more expensive than they have ever been. Ever. At
32
                times trailing earnings, the S&P500 stocks have never been
more
                expensive, based upon business earnings, than now. Prices
tend
                to gravitate towards the mean over time, so prices should
fall
                eventually.
                The economy is weakening. Although few are predicting a
                recession, most economists are predicting a weaker overall
                economy for the coming year.
                The declining trend in corporate profits. After rising
                continually in the early 90's, earnings are on a downward
trend.
                Every quarter in 1998 has seen an overall decline in
corporate
                earnings (S&P500 earnings, representing 70% of the overall
stock
                market). The coming quarter is also expected to show lower
                sequential earnings. Yet stock prices keep rising.
                The advent of the Euro threatens the dollar's dominant
position
                as the world's currency. Right now, the US benefits from a
net
                inflow of foreign capital. If the Euro, and Euro-denominated
                investments, become a competitor for foreign investments, it
                means higher interest rates for the US, and lower stock
prices.
                The complete puzzlement of professional investors.
Professional
                money managers who have been in the business for years find
it
                difficult to explain the market. Last year, such confessions
                were made privately; now many commentators on television
confess
                openly that they lack a full understanding of what is
happening.
                The new and growing trend of semi-professional daytraders.
Over
                the past two years, the number of individuals who have quit
                their jobs and begun professional daytrading as a profession
has
                boomed. We don't have hard evidence to present, other than
the
                astonishing growth of individual accounts at daytrading
firms
                such as All-Tech, but the trend is undeniable. The argument
for
                a top, particularly when made by a professional money
manager,
                usually asserts that these people are amateurs, and
therefore
                will panic in a drop.
                Political problems: The trouble in Iraq and the impeachment
of
                the President should be major problems for the market, but
they
                aren't. The fact that these issues do not affect the market
                points to the excessive emotional nature of investors today.
            On top of these arguments, the anecdotal evidence seals it for
many
            people. Usually, anecdotal evidence comes into the argument
along
            with a reference to the most famous anecdotal top indicator of
all.
            In October 1929, Joseph Kennedy, patriarch of the entire Kennedy
            clan, was asked by his shoeshine man what stocks he should buy.
            Deciding that this was evidence that everyone was now in,
Kennedy
            took huge short positions across the entire market. When the
market
            finally collapsed, the Kennedy fortune, already substantial,
became
            incredible.
            Hardly a day goes by when we don't hear someone drawing their
own
            anecdotal analogy to the Kennedy-shoeshine story. The fifteen
year
            boy who asks for stock picks. The Russian immigrant dry-cleaning
            lady, two years into the US, asking about Amazon.com. The
retired
            accountant who daily trades stocks until 2:30, then heads to the
            golf course for the after-three discounted round. The list is
            endless.
            Boiled down, the argument for the top is: Stocks are overvalued
and
            since prices eventually return to a value based on the
underlying
            business, the future is lower prices.
            One problem with most of the arguments for a top is that they
have
            become old. We've heard them all before. Last year, and some the
            year before.
            Like Damacles, who lived with a sword suspended over his head by
a
            thread, investors have become comfortable with the omnipresent
risk
            in the market.
            Arguments For the New World Order
            Arguments for why the stock market is still heading up often
focus
            on a single point: The Internet Revolution.
            The Industrial Revolution completely changed the then existing
            economic structure, and pulled everyone alive at the time into
the
            future. Although modern history books often focus on how
miserable
            the lives of workers were in factories and mills, the industrial
            revolution, overall, lifted the standard of living for everyone
in
            its tide.
            The Internet Revolution, the argument states, will do the same.
            Efficiencies in distribution and marketing will benefit all
            ecommerce companies. Economies of scale achieved by the largest
            ecommerce companies will drastically lower prices of all types
of
            items. Consumers will benefit and be able to purchase more
items.
            Entirely new types of products will become available.
            Because the size and scope of the impact of the Internet can't
be
            predicted, current metrics for valuation are meaningless, the
            argument goes.
            In addition to the explosive new Internet economy, the new world
            order argument includes arguments as to why stock valuations
will be
            higher than traditional valuations.
                The incredible growth of mutual fund assets. Since 1992, the
                growth in total mutual fund assets has been on a steady
uphill
                trend. The continual inflow of money means managers must buy
                stocks, regardless of current valuations.
                The growth in retirement plans. The traditional pension plan
is
                a dinosaur. Although the lion's share of institutional
                investments are still pension fund assets, new money is all
                coming from 401(k) plans. The number of 401(k) plans, and
the
                amount of money employees contribute are all on upward
trends
                that will continue.
                The shift in retirement plan asset allocations.
Traditionally,
                pensions funds maintained a 50/50 split between stocks and
                bonds. Early in the 1990's 401(k) plans were dominated by
                conservative investments, with nearly 75% invested in
                fixed-income instruments. After an onslaught of mass media
                preaching that stocks provide the best returns, the mix has
                completely shifted, with stocks now having the lion's share
of
                all retirement plan assets.
                The role of the individual investor. Unquestionably driven
by
                the growth of the internet, individuals have become
principals
                drivers of some stocks. Some stocks, Amazon.com (AMZN) are
                notable examples. Amazon.com has remarkable few
institutional
                investors for a stock its size. Individuals, the argument
goes,
                are more likely to ride out declines than professionals.
                The advent of daytrading systems. Technology now allows an
                individual to act as a market maker and steal market orders
from
                the professional market makers. This provides greater
liquidity,
                but also makes volatility much higher. Ironically, the
advent of
                daytrading systems is also used as an argument for the top
by
                professionals.
                The new role of press releases. Press releases, by
themselves,
                usually don't mean anything to the business. Most simply
                announce the company's intent to enter new business arenas.
New
                customers do not start buying the day a press release comes
out.
                But stock purchasers do. The willingness of investors to
believe
                in the promise of a press release simply shows how strongly
                investors believe in the new world order. Rather than being
                viewed as an aberration, it is viewed as a confirming signal
                that others believe in it as well.
            Boiled down, the argument for the new order is: the Internet
            revolution, combined with increased demand for stocks, means a
new
            set of rules are in place, and the future is up.
            The evidence that a new set of rules is in place continues.
            Recently, insurance companies have begun discussing the
possibility
            of offering insurance for reported corporate profits. For a fee,
the
            insurance companies will guarantee any shortfall between
projected
            revenues and earnings and actual results. Not available yet, if
it
            is offered, it would completely change the meaning of an
earnings
            release. Instead, the acquisition of, or inability to obtain,
the
            earnings insurance would become drivers of the stock.
            Inevitable Collision of the Arguments
            Both arguments are valid. The underlying points are true, and
            support the assertions. But they can't both stay true forever.
            As an example, consider Rocky Mountain Internet (RMII), which
was up
            13 7/16 on Monday (to 25 15/16). Yesterday, RMII closed at 16,
down
            9 15/16.
            Rocky Mountain Internet is an Internet Service Provider, but
they
            also have value added services. One of these is providing an
instant
            ecommerce solution for small businesses. Any small business can
            become an ecommerce company by using Rocky Mountain's service.
            If the Internet Revolution argument is that the new giants are
going
            to dominate the ecommerce world, how can Rocky Mountain Internet
            also prosper long term by making smaller businesses succeed in
            ecommerce? If the small business succeed in ecommerce, how can
the
            larger companies dominate? Are we all going to buy more? Not
likely.
            It's a built in conflict in the market, not unlike betting on
black
            and red on the roulette table. Somewhere along the way, the
Internet
            pie will be divided up. Not everyone will be a winner simply
because
            they have Internet capability. Rocky Mountain Internet and
            Amazon.com cannot both be successes beyond everyone's wildest
            dreams, based on the argument that each will explode via
ecommerce.
            Briefing.com finds both arguments intriguing. We believe in the
            internet revolution, but we also believe that stock prices must
            ultimately reflect the lasting value of a company. For now,
however,
            the supporters of the new world order will likely support stock
            prices at levels that the valuation believers find
uncomfortable.
            But some kind of reconciliation of the two arguments is likely
soon.
            1999 may well be the year that writes the next chapter in this
            historic stock market.
Copyright © 1998 Charter Media, Inc. All rights reserved.

grazie
gus