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Strategies & Market Trends : Waiting for the big Kahuna

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To: Arik T.G. who wrote (3527)	7/31/1997 2:51:00 PM
From: Tom Trader	of 94695

Arik, thanks for your post >>TT, the reason 30 years bonds yeild is over 6% is that it's in equilibrium with stocks<< I disagree with you; the reason that bond yields are at 6+% is because inflation is not perceived to be a problem and the amount of borrowings by the Fed goverment is declining as the deficit goes down. In fact what has surprised me is that yields are not lower still. On the over-valuation of some stocks--I agree completely and I don't own them. Further, I will not buy them except as a quick trade. >>If yeild drops below 6%, I suggest everybody should run to the mountains<< If the yields drop to below 6%, the term "irrational exuberance" to describe what will happen to the stock market, will be an understatement--unless it is because of an impending recession. You and I disagree regarding whether a crash is imminent---a correction of 10-15%, yes. A crash -- no. Time will tell who is right. I am now 80% in cash -- to redeploy after a correction Take care

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