Institutions control the majority of the float. As soon as fund managers realize that CSCO isn't going up they will dump as much as they can as quick as they can. Institution control means nothing if we are in the beings of a bear market. According to William Fleckenstein's historical research through newspapers and periodicals. In 1929, after the first leg of a bear market that took 2 years to complete, analysts, fund managers, and investors described the market conditions just as they are today. Same wording, same arguments, same old everything! I think we have a long flight of stairs to bounce down on the NASDAQ.
I liked another one of William Fleckenstein's arguments. He talked about the idea that in 1929 we were just at the start of a major technological explosion that was over estimated. Manufacturing automation, Telephone, Radio, TV, Automotive etc. etc. etc. He argues that the combined effect of these advances is more dramatic then the Internet effect today. I agree. The 1929 market was up 280% over 5 years, the NASDAQ was up over 480% over 5 years at the high. Margin debt is higher per investor today, personal debt is higher, government debt is higher. These arguments have power. That's why I went to cash. The COMPX chart looks terrible. I will daytrade and gap play only until these conditions change.
Bambs |
