Waves, Patterns & Projections (2004)

Not too bad, thanks chestnuts !

To my mind, its a question of whether we are going to repeat the 1990s style ever upward (with mini-corrections) pattern. If we are, then there will not be another pukka Bear market for several years. Make no mistake, the 2000-2003 UK Bear was a Lulu @ (52.71%) and I'm still scratching my head as to why FTSE hasn't already got back to 6000 when at least half of the FTSE constituents have SPs in excess (many significantly) of where they were when FTSE was at 6951.

At the end of 1999 the FTSE total market cap was about £1800 bn. The only real significant declines since then appear to be GSK, Life Assurance, Media & Telecoms. The latter was worth about £300 bn back then and is now worth closer to £100 bn.....so the decline in Telecoms has taken about £200 bn or c772 FTSE points out of the market. Life Assurance is down about (25.00%) or c £15 bn and GSK has lost about £25 bn from its previous incarnation of Glaxo Wellcome and Smithkline Beecham. I would estimate Media has lost about £40 bn. That little lot comes to about £80 bn which is a further c309 FTSE points giving a total of c1081 FTSE points equating to c5870.

That doesn't really make sense because alongside these reductions have been significant increases in valuations for Resources, Real Estate, Tobacco, Beverages, Utilities and Defensives generally (Oil stocks have stayed at similar levels). Obviously these started from very low bases so the net effect may be only c+£100 bn on the FTSE or c386 points but that would still suggest a value for FTSE of c6256. Banks might have come down a tad but there is still about £200 bn or 772 points gone missing.......it may be that the TMT valuations (including the likes of LOG, SGE etc) were more pronounced at the end of 1999 than I have given them credit for.