Remora

Poor Business Week chose the wrong day to headline an optimistic forecast by a Morgan Stanley Investment "Strategist" Barton Biggs. As WorldCom basically takes itself off the field, here's what Briggs -- a man BW bills as usually "dour," in order to give credence to his pap - has to say:


"Since its 2000 peak, the Nasdaq has fallen as much as the Dow did from 1929 to 1932, notes Biggs. And it has dropped more than Japan's Nikkei index has since its high in 1989, he adds. "The pattern of the equity markets since last summer has been classic," says Biggs, in foretelling that a double bottom is about to happen -- or has already begun.

A VIGOROUS RALLY. Given all these, "we have increased our exposure to equities," says Biggs. Assuming the September lows hold, as he expects, rallies of 15% to 20% are conceivable in the broad indexes in the U.S. and Europe, predicts Biggs.

In the U.S., he forecasts that over the short term, the Dow will climb to between 10,800 and 11,000, from 9,380 currently."

Biggs, and others of his ilk, gain income "strategizing' by doing such dumb and dumber things as bringing up comparisons between the Nasdaq and the Nikkei, as if these comparisons were some kind of argument. There might or might not be reasons to think, hey, these are comparable situations. But comparison itself, without analysis, is blind, deaf and dumb. And so would be any investor who listened to someone like Biggs. One could easily envision the Dow hitting 10,800, but not for any of the reasons given by Biggs. And, right now, one can as easily envision the stockmarket version of the gutter ball -- a constant trough, between 9 and 10 thou.

Here's the Washington Post, quoting a less dour, and more paniced, investment "strategist" about the current market:


"At Merrill Lynch, meanwhile, Bernstein has warned clients of a "considerable near term risk" that could see a further 10 to 15 percent decline in the major stock indexes. With the stocks of the S&P 500 still selling at 24 times their expected earnings next year, he said, "our view is that the market, even at this level, is still quite speculative." The historic average is around 15.

"The implications of further declines in stock prices are anything but positive for the broader economy. Although this doesn't suggest the economy will slip back into recession again, forecaster Sinai sees little hope that the economy can grow at the 5 and 6 percent annual rates normally associated with economic recoveries. His forecasts calls for growth rates at half that."

Business magazine circulation is way off this year. And headlines like BW's are the reason. As the biz media became a pipeline for the uplifting crap diffused by glorified bucket shop salesmen, they lost credibility with their readers. Until they take a tougher approach, who is going to read them? A shrinking pool of suckers and pr men, that's who.