Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (7295)	10/25/1997 10:57:00 AM
From: Joan Osland Graffius	Read Replies (1) of 94695

Hi William, Priority things first: We got back from the PSU games this week and here in Minneapolis you could think the gophers won their game.:-) We will see what kind of character the kids have in November. We are heading to Northwestern next week. Now this market. You seem to be a rational head. Fortunately, I got out of all margin positions before this weeks meltdown and am holding my long term stock positions, bonds, Reits and a growth fund that is 99% in energy and bonds. Also have short positions in SPY, I have been shorting above $97. Hopefully, these SPY positions will dampen the effect of my long term stock positions going down in a bear market. One thing I did not like was the effects demonstrated in most markets last week after the problems in Asia. We have not seen a meltdown in the US markets, but the real question is will fear set in. The folks on Wall Street that I have confidence in are now cautious. This tells me they don't know what the reactions will be and it also tells me they don't believe they could convince folks to stay in the market. The chief stratigist at Merrill Lynch came out on Monday recommending moving from stocks to US Treasuries, but this week Louis Rukeyser recommended short term investors take profits in US Treasuries at 6.25%. He had recommended some time ago buying at 7.25% and for those with a short term horizon take profits and those with long terms horizons should hang in there. With this data it looks like there is sufficient uncertainity in the near future. I personally do not see a "meltdown" comming from economic factors right now but there certainly is a risk in lower earnings going forward. Currently the market looks like maybe 2 to 3 percent over priced if earnings continue, but if they slow down we could be 5 to 10 percent over priced. It is my opinion the investor is the wild card. Are people going to move their money from equity funds to bonds, or cash. I can not see in the future - darn.:-) Joan

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