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Strategies & Market Trends : Puff Daddy's Mo' Money Mo' Problems
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To: SouthFloridaGuy who wrote (811)4/13/2000 12:01:00 AM
From: mph  Read Replies (1) of 896
 
Here are the facts you supplied:

1) Fed pumped liquidity in 1999 prior to Y2k.
a) Foreigners saw USA as a safe haven prior to Y2k.

2) Many hedge funds thought 2000 would see a retreat - particularly the beginning of 2000...many learned traders thought people were holding off profits of 1999 to sell into 2000 because of tax implications.
a) These hedge funds shorted.

3) January to mid March was a short squeeze. A great stock for evidence is Rambus. It is well known amongst circles that RMBS was being shorted the hell out of and many pros were forced to cover at substantial losses.

4) Reallocation into larger cash position and out of tech by pension funds, CalPers (my former employer) is an example in mid March. Abby Cohen' Mark Mobeius...particularly Mark, a hero of mine since I was in junior high school.

5) Fed draining liquidity now that Y2k is over.
a) Foreigners selling because they see opportunities in their own emerging markets.

6) Intense margin buying by daytraders, hedge funds, and an overall arrogance about man's place in history.

7) The charts. Take all emotion out of the game and go strictly by technical analysis.

#1 occurred prior to the end of 1999 and was a topic of discussion around SI.

There was also plenty of discussion about #2 before the end of last year.

Although I don't follow the short interest figures myself,
if January through March is all attributable to short squeeze (#3), backup data was available long before April.

#4--public discussion of funds moving to more cash
was highlighted by mid-March, but I would bet that
information was available sooner. That was also about
2 weeks before you morphed into a major bear.

#5 -draining of liquidity has also been a topic of discussion long before April. Plus, investment in
emerging markets was touted well before the end of 1999.

#6--margin debt. Those figures are maintained and were presumably available long before the end of March.

#7--the charts---well, you'd have to be more specific.
It depends on which chart you're looking at. Obviously
some have changed dramatically over the past month, so I'll give you that one.<g>

As far as calling me stupid, that seemed to be the
principal point of your first post to me tonight.

And I do apologize for seeming to lecture on your attitude.
I thought I was offering a friendly suggestion and a
different perspective since you appeared to be upset
about how you're being perceived.

Obviously I was very wrong about that.
Perhaps even stupid.
I assure you it won't happen again.

M




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