Thoughts from the Frontline

Cause for Optimism?

By John Mauldin

June 30, 2001

Cause For Optimism?
On the Other Hand?
My (Cynical) Take on the Interest Rate Cut
The Real Issue: Consumer Confidence
Bonds, and More!

If you are confused by the blizzard of news that came out this week, then you are in great company. The level of disagreement among analysts and investors is becoming more and more shrill. How could PMC Sierra show such really bad numbers, get downgraded across the board, and open up 5% on the day? With all the bad telecom news, how could Lucent and JDS be going up?

Before we examine the data to get some idea of where the economy is headed, I should note a general principle I use in deciding who I REALLY listen to. First, I look at how an analyst or talking head makes his or her money. Then I try to understand the logic behind their opinions. Then I look at their track record.

But the most important thing is where they get their income. The…

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