[unrev-II] Sir John Templeton on the bear market

From: Jack Park (jackpark@thinkalong.com)
Date: Thu Jul 05 2001 - 12:23:06 PDT

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    http://www.treasuries.com/templeton.html

    "Templeton said he is warning investors that the recent "technology bubble
    ... was far bigger than any previous bubble of any nation ever. … Now is
    not the time to buy common stocks."
    In fact, Templeton says, he is encouraging those who will listen to stay
    out of the stock market almost completely and invest in long-term
    uncallable bonds.
    "I really remember 1929. It was fascinating. ... I like to keep it straight
    to arithmetic. How high were the prices [in 1929] in relation to earnings?
    The maximum was 29 times earnings. Now, in the recent bubble, the Nasdaq
    went up to 300 times earnings and is still over 100 times earnings, even now."
    Though he believes the market will eventually recover – and the Dow may hit
    more than 1,000,000 by the end of this century – it may take years.
    Using an old rule of thumb employed by professional investors, Templeton
    said bear markets often last half as long as the preceding bull market.
    He counts the bull market as having begun in 1982 and having ended last
    year – an 18-year run – and wonders out loud if we may be witnessing "maybe
    a nine-year bear market."
    "

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