You are correct. What is even more interesting is that if you look at the earnings picture of theses 250 stocks and compare the P/E ratio of this group with that of the remaining market, you see very clearly an inflated price structure, because of earnings of the 250 are not at all impressive.
Also, the stock market is in fact predictable, but not precisely both in timing and peaks and bottoms, because those elements tend to be technically driven with dynamic wave effects rather than fundamentals. One thing is certain, the longer the bull market, the more severe the bearish correction when it comes. Depends on what the Fed does, the prospects are between a drastic crash or a relative softer, but still sever, extended landing. Abby Cohen is going to be famous for delaying the crash by 10 months, but not for turning the market around. My bet is next July or August at the latest.
Henry
Doug Henwood wrote:
> Greg Nowell wrote:
>
> >Jay Hecht wrote:
> >Take out the top 250 market cap stocks and there was no
> >gain in the stock
> >market (claims latest issue of Barron's)
> >
> >GN:
> >
> >Take off five pounds round my midrift and I didn't gain
> >any weight over the holidays.
>
> No, that's not what Jason, or Barron's, meant at all. The point is that
> almost all the gains in the U.S. stock market over the last year or two
> have come from a small number of stocks. That sort of thing is usually
> associated with late bull markets (e.g. the Nifty Fifty days of the early
> 1970s), if you believe that the market is somehow predictable.
>
> Doug