The best post during this crisis-
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To: +Burjis S. (12892 )
From: +bob wallace Monday, Oct 27 1997 8:42PM EST
Reply #12894 of 13043
I note that this thread is pretty quite tonight, so I am wondeing if anyone has read a book called "PANIC PROFITS" by Joh D Brown?
Well, in case anyone hasn't <G>, the market action of the last three days pretty well fits the profiles of panic
-sudden
-violent
-continious barrage of bearish news
-extremely high volumes
-intense
-instant fear that this is the beginning of the end
Relax.
This has all happened before:
prifile of 7 panics which inparticular marked the end of a bull market:
-they all happened between Oct and Dec, market highs were primarily in Sept or Aug
-the average Dow decline before the panic was 7.5%
-the averge Dow decline during the panic was 22%
-everyone of them struck "while the bull market was assumed to still be in progress, and thus remain among the most frightening of all such instances"
THE GOOD NEWS IS THAT EVERYONE OF THEM WAS FOLLOWED BY A SIGNIFCANT
REBOUND
If you figure this particular panic started on the 23rd, then we are
about half through in terms of the average total decline (the smallest decline was 14%, the median decline was 17%, the biggest was 40%). In terms of duration, two of them lasted 5 days or less, the rest from 11 up to 22 days.
So as Ike said, let's let the market find the bottom, keep our powder dry, and be ready to buy, because even if this is the end of the bull, a good rally will follow like night follows day.
Also, it is probably too late to do any selling, though I will sell off a couple of utilities that amazingly enough still have some profit in them. Need that margin next week <G>
Be glad to answer any questions about the book
Bob |
