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October 5, 1998

The key to the U.S. stock outlook isn't Yeltsin's longevity as Russian president or Clinton's sex scandals. It isn't a risk that Asian financial collapse will spread here. It isn't even the Fed's next interest rate move, up or down. It's corporate earnings, and the outlook is not good.
     A. Gary Shilling in "Kiss the bull good-bye" from Forbes (10/5/98)

Here we go again. It's October, the month in which most stock-market crashes have happened . . . In 1929, the Dow industrials plunged 23 percent in two days. In 1987, they fell 22.6 percent in a single day . . . In my judgment, the biggest single reason for the disasters of 1929 and 1987 was that the market was so overpriced. And that is also a reason to be fearful today . . . After the slump since July's high, the S&P 500 index today sells for 25 times the earnings of its component companies, 5.5 times their book value (corporate net worth) and 64 times their aggregate dividends . . . In 1929, stocks sold for about 24 times earnings, four times book value and 32 times dividends. In 1987, they sold for about 21 times earnings, 2.8 times book value and 36 times dividends. You will note that today's ratios are higher across the board.
John Dorfman in "It's October; Watch Out for Stock-Market Goblins" from Bloomberg (10/1/98)

Some of my daughter's friends graduated from college, watched stock-market television programs and traded online. That was their livelihood. Now they're watching General Hospital and looking for jobs.
Robert Olstein in "Throwing the Books At Them" $$ from Barron's (10/5/98)

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