Ccryder, certainly I agree with you in terms of the international problem. BUT it has been going on for a while since George Soros (one of the gutsy-iest player out there, IMHO) trashed the Asian currencies, so the exchange are reviving old news to scare off investors.
Remember back in April, people were fear of further rate hikes and blah blah blah. Now, inflation is not the fear, currencies are. The exchange always have flaws to pick on. When the US is imperfect, they pick on the US. When US is close to perfect, it picks on other counties. I will not be surprised that inflation concerns or international conflicts will be another reasons to drop the market, AFTER THE RALLY THAT NEY AND I PREDICT.
(By the way, I heard from someone who heard from someone on the media that Soros was "cornered" by the floor brokers when he went short on the indexes and/or the currencies in Oct 27 and 28. Therefore, the sharp rise in Oct 28 has two purposes--to sell short to investors by the exchange, and to make Soros to cover his butt. Its a zero-sum game, somebody wins, somebody loses. I supposed that the people in the know did not want to let Soros win. Sob sob....2 Billion bucks)
The lack of confidence is the atmosphere the exchange wanted to protrait. Example, if the Dow rally up to 7700 tomorrow and 7850 on Friday but the exchange keep on pumping some negative news. I doubt that alot of people will buy in. Therefore, the exchange will not sell too much of their inventory at these lower prices. Then next week, positive news pump out by the media (exchange insiders), and people started buying and resumed confidence, therefore the exchange have accomplished their trick--to minimize public buying until prices are higher)
And think about this, when the Asian currencies are weak, they attract alot of foreign PHYSICAL investments, such as plants and overseas offices (Its dirt cheap to build a plant overseas and hired cheap labor). This way, the Asian countries development will strenghten after this whole thing is over. China, in particular, if the management in the top do well, will be one of the strongest nation in the world in 50 years, after United States and Germany. (I was born in Hong Kong and my dad does some business in China, Taiwan, little in Japan and Korea, so I know) So, the currency problems oversea are ugly now. But somebody lose while somebody wins, US are benefiting from this turnmoil in recent terms, if you think of it that way.
Not to mention that international corporations retain their earnings overseas. Therefore, although their earnings are shattered in US dollars terms, the overall earnings are in OK shape. My dad's finance guys hedged currencies already so the finance situations are in good shape for his company. Also, his company bought in LARGE blocs of HK stocks during the HK slide to 9000 level (HK stocks are mainly real estate holding companies, and has high book value and low PE). He said, "Its next to impossible for me to push my company to growth at a rate of 15%+ (kinda hard for a billion dollar company), so why dont I buy some stocks that will give that kinda return."
Remember how I turned short term bearish two months ago, I am back to my bull phrase now due to everybody else is bearish (Contrarian thinking). However, depending on the specialist short covering and buying inventory at lows, some sectors will remain weak. Some such as tech stocks will recover sooner, as oppose to contrary belief that they will get hurt. (Media will use "bargain hunting" to describe that")
Remember this, buying does not cause a rally, but its a rally that causes buying. People buy at the tops. (kinda like JBIL for me, althought I bought at the 60s not the 70s)
Ney did not EVEN predict or use foreign market as any sort of indication. He just turned bearish DURING the July rally due to he saw the tax selling by insiders and large blocks short sales at the top of the rally.
United States of America, is strong enough to withstand against such storm. So while others fall, someone (US) has to gain.
My margin gets pretty bad so I am watching out. But I remain bullish and believe that we will see new highs in Jan 98. (Its my own opinion and target, Ney only mentioned new high in 98 with no timeframe. Afterall, its the exchange insiders that know where the stocks will be).
Someone said that no one can time the market. I did not think so. Exchange insiders do. THEY ARE THE MARKET. They have every buy/sell orders of the future and the past in their book, they know what Rubin will do, they know what Al Greenspan (Al was so nice that he warned investors before the slide, but he was blamed as the one who started it) will do. They know how much earnings the companies are making. All they dont need is somebody who knows how they play the game. Ney studied all that and discarded all the conventionals (earnings, inflation...bullcrap).
I still value Lynch and Buffet as mentors (Lynch and Buffet talks about how to pick a company, but do not say when), but Ney is the near perfect market timer and I use his theory exclusively. |
