If you think this bear is scary, better hold your hats. It hasn’t even begun to growl.
That’s according to Michael Lewitt, Harch Capital Management president. He tells us, the stock market could drop another 40% from here. In fact, he’s predicting Dow 5,000 by mid-2009.
We know what you’re thinking. He sounds like another one of those end of the world,doom and gloom forecasters. And perhaps you’re right, but it’s worth noting that earlier in the year Lewitt warned of a coming collapse.
“'There is a distinct possibility of a sharp decline over the next 6 to 9 months", he now says, in part because economic activity “fell off a clip in September and hasn’t recovered.”
”In general earnings will be down substantially next year. But a lot of strategists are putting multiples on earnings that are way too high,” he says. That doesn’t bode well for the Dow.