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Not Yet A Bargain
-- June 17, 2002
Stock prices have tumbled considerably over the past few weeks, but they have MUCH farther to fall before they reach bargain-basement prices. Today's rally was merely a bear-market trap, luring investors in just to snap shut and devour them when prices plunge again.
After all, look at the basis for the rally. It certainly wasn't solid fundamentals. McDonald's announced that it would beat Wall Street's expectations only because it had the good timing of a slumping dollar -- not because sales actually improved. In fact, the company announced that sales would actually be weaker than expected. And though Wal-Mart said its sales would meet estimates, Sears and Federated Department Stores said their sales would come in below estimates. This isn't exactly new news because, for months now, frugal consumers have been flocking to Wal-Mart to save money and away from traditional department stores. This certainly isn't a sign that the economy is picking up.
Plus, investors reacted to the fact that no new scandals have broken out on Wall Street. Is that really a reason to jump back into the market? No way. The chances are good that a new scandal will pop up tomorrow or the next day, dragging stocks right back down again.
Whatever the reason for this temporary rally, we say this could be your last and best SELLING opportunity.
Bargain Prices Send Stocks Soaring