Some Thoughts

While I have been wrong a lot over the past few months, I would point out a few important factors that we should keep in mind. 1) The time to buy is when recession is confirmed [I've been beating the Sep/Oct/Nov drum for this to occur for a long time] 2) The recession is not just starting as most believe - it's in the 6th or 7th inning [I finally found an article that shares my viewpoint that the recession started in Q4 2007: http://news.morningstar.com/articlenet/article.aspx?id=262592&pgid=hparticle] 3) Once the economy turns around [which requires two things to happen a) credit crunch to end which it mostly has and b) a restoration in trust in the economy which could happen at any time] it will likely be "too late" to buy (it won't be, but it will feel too late as we'll be far from our lows).

We may or may not revisit the 10/10/2008 lows, but I believe the 2002 lows will hold in any case -- because I believe the economic outlook is a lot better than most expect.

Also, Jeremy Siegel posted a good article on Yahoo that you may wish to review [http://finance.yahoo.com/expert/article/futureinvest/118916] in which he argues for a 20% return over the next year. One of his big points is also one of mine - that it's unreasonable to use trough earnings as the denominator in a P/E and compare to "normal". He claims that Ford, GM, and Sprint are less than 0.2% of the S&P 500 yet reduced the S&P's earnings by over 20% due to massive losses.

Look for high volatility to continue, but subside over the next 3 to 9 months. Conservative investors should strongly consider intermediate term investment grade corporate bonds.