http://www.nytimes.com/2008/11/16/business/16fund.html?pagewanted=1&_r=1 "âCheap valuations are simply a symptom of whatâs wrong, not the catalyst to get the market out,â said Richard Bernstein, chief investment strategist at Merrill Lynch. After all, just because stocks are trading at extremely low levels today, it doesnât mean they canât become even cheaper tomorrow." ... "The most recent survey taken by Mr. Bernstein, about two weeks ago, shows an allocation of around 58 percent stocks. While thatâs down from the mid-60s percentages of the start of last year, itâs still far from real pessimism. âWeâre still hovering right around the long-term average,â he said. His own assessment is more bearish. He recommends allocating 50 percent in stocks, with the rest in bonds and cash." ... "While profit projections have declined, they may still be way too bullish. According to a survey of analysts by Thomson Financial, earnings growth estimates for S.& P. 500 companies in 2009 have fallen well below the rosy 22 percent forecast at the start of October. Still, theyâre expecting corporate profits to grow more than 12 percent next year. Since many are predicting a difficult first half of the year, thanks to the weakening economy, this would assume a tremendous profit surge in the latter half of 2009." "Christopher N. Orndorff, head of equity strategy at Payden & Rygel, an asset manager based in Los Angeles, predicts that âthe earnings releases in January are going to be poor.â That should drive down earnings forecasts for 2009 even lower, he said." "If earnings forecasts begin to fall substantially, he said, âit will be very difficult for stocks to rally.â "