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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: isopatch who wrote (88415)	3/8/2001 1:03:31 PM
From: paul feldman	Read Replies (3) of 95453

From DOWNSOUTH on the Gorilla and King thread: Being a bear right now is as dangerous as being a bull in last year’s bubble. money.net "The premise of the bear case is that capital spending in Telecom continues to decline, which forces smaller Telecom companies out of business AND takes down many suppliers down with them. The theory is based on a prediction that the Fed was too late to save these companies and the end results spin us into a depression-like scenario that takes-down ALL stocks. The argument makes sense if you consider the situation that Japan is in right now. It certainly seems possible that we were not able to learn from their mistakes. The problem with that line of thinking is that WE ARE NOT JAPAN! Our corporate culture is much different. We tend to crunch debt, turn it into equity and move on. Japan has yet to re-liquefy their debt. Perhaps we learned through the savings and loan crisis in the late 80’s. We got through that mess. It took some time and it wasn’t pretty but we got through it. To listen to someone like Bill Fleckenstein on CNBC last Friday and hear how he isn’t buying ANY stocks (he is shorting many companies) and is only buying 2-year treasuries, tells me that he hasn’t learned much either. Admitting to have missed all of the last bull market, he is proud to say he has not been torn-apart in this downturn. Sounds good right now. I don’t know. I would have rather lost 30 percent and still be up 50 percent over the last five years than be compounding safely at five or six percent. Avoiding all stocks is like saying that companies like Alcoa AA and McDonald’s MCD are headed for bankruptcy. Avoiding all stocks demonstrates a clear lack of fundamental economic concepts. When the Fed changes monetary policy and begins to ease, it always helps the bottom line- even for poorly-run companies. Being a bear right now is as dangerous as being a bull in last year’s bubble. It is as stupid as being bullish on "only Tech" right now. It is ignorant to ignore the bull market in the NYSE, where money is being made in "boring" stocks. Being a bear means that you have no belief in corporate America and that we got where we are today merely by accident. I think that is extreme. Being a "full-time" bear is in my mind- un-American. While there are always companies that do not survive a severe economic slowdown, there are many companies that actually become better because of it. While it makes sense at different times to be either bullish or bearish, it is never a good idea to become a full-time bull or bear. There is no one camp that always gets it right. The way to make money long-term is to maintain an optimistic spirit and be flexible enough to change with market conditions. In other words, I’d rather wear the costumes than actually be the animal! Joseph C. Newtz is an Independent Financial Consultant. At any given time, he or his clients maybe long certain positions mentioned in this column. Newtz's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at bullrun@stargate.net. --------------------------------------------------------------------------------

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