The Justa and Lars Honors Bob Brinker Investment Club Thread Message Board

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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread

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Nov 26 4:00 PM EST

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To: marc ultra who wrote (1547)	10/29/2001 12:59:06 AM
From: marc ultra	Read Replies (2) of 10065

theoretical outlook thrown out for consideration. Let's say with all the monetary and fiscal stimulus going around we assume the economy bottoms around sometime in 2002. Now the market historically bottoms roughly six months before the economy. So we could roughly guess the start of a cyclical bull as somewhere between now(conceivably started already) or else some time in 2002. Looking at productivity it is doubtful we will be back to extreme levels of productivity growth since you will have some head winds like costs for extra security, tendency to hold some inventory rather than just in time, and no new internet bubble(been there, done that) and some retrenchment or at least stabilization of globalization effect with current turbulence. Also peace dividend is obviously somewhat shot and of great importance is the fact that growing gargantuan surpluses as far as the eye can see are gone thus losing downward pressure on interest rates over time. So it sounds like we have all the ingredients of a cyclical bull soon to be realized but coming out of it we'll have Fed tightening once economy improves and all that money gets sucked up again. Long term positive secular trends have also disappeared within a matter of a year or so. The result is guess what? A cyclical bull in what will now be within the context of a secular bear. So for those still over invested such as myself it sounds like try to ride to the top of a cyclical bull and then play rope-a-dope with a big measure of fixed income etc. It seems like Bob's assessment and speculation about where the market is in the grand scheme of things is making more and more sense in terms of facts and trends on the ground. Marc

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