Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

REFR 1.570

+0.6%

Nov 10 3:59 PM EST

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To: Bill Wexler who wrote (6004)	1/12/2000 4:43:00 PM
From: Bill Wexler	Read Replies (2) of 10293

The bond yield can no longer be ignored. I don't know about anyone else here, but my perception of risk in the market has gone up dramatically with the bond yield crossing 6.7 and heading inexorably towards 7%. I sold more (DEEP in-the-money) covered calls today and scaled back on a few positions. I bought more MO and will probably start shifting a lot of cash to bonds when we hit 6.8 - 6.85%. As usual, I could be wrong - but the atmosphere is getting too risky to play the: "let's catch another 5 points up...wheeeeeee!!!" game. I made a lot of money in 1999; I'd rather sit on it at 6 or 7% nearly risk free than ride a potential 50% decline in some of these stocks. By the way, this has nothing to do with the underlying businesses. I think companies like SUNW are still going to have stellar years. I'm just concerened that the multiples will contract despite the fact that earnings will be robust because you can't fight the exponentially increasing drag of interest rates on stock prices forever.

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