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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Digger Sacket who wrote (13278)4/16/2000 4:01:00 PM
From: Hank Stamper  Read Replies (2) of 15132
 
"If it's too late to get into cash at this level, does that mean not much downside from here on???"
Second clause: If you begin with the assumption that this is a bear market, then we are in the first big leg down, there will be great downside from here.

That only refers to the numbers! Perhaps just as important (more?) is the psychological effect a bear market has: it grinds down then has a powerful counter-trend rally and people regain some hope. The hope fades when the next leg grinds down even lower; fear takes over. The fear fades as the next counter-trend rally pops off. Then, the down-trend takes over again....those left with substantial equity holdings are ground down with the relentlessness of it all. At the bottom, they are demoralised; they have been whipsawed by their emotions. The ones who remain, sell at the very bottom in the last panic-driven blowoff. Read the accounts of previous bear markets.

First clause: Bob has answered this on the radio several times. He said, he has no advice for someone who did not follow his Jan call. Somewhat in contradiction, he said, a person might try to time his/her exit for the top of the next counter-trend rally.

Ciao,
David Todtman
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