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Pastimes : Ask Mohan about the Market

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To: Sam Citron who wrote (9472)	11/26/1997 10:27:00 AM
From: Mike M2	Read Replies (3) of 18056

Sam, I am not implying this mkt is a bubble. I am stating unequivocally that this mkt is a bubble of historic proportions. We have shattered virtually all the past valuation records i.e. price/book,pe,dividend yield,mkt cap as a % of GDP,public participation et.al. However, valuations do not work as a timing tool it simply highlights the extreme risk in the mkt although it is not apparent to new era investors. I must say I have been bearish for quite some time and that I cannot time the mkt but I feel a minimum decline of 50% from the eventual top is quite reasonable; it will probably be worse. I am sure entire books will be written about the bear mkt of 1998? assigning blame to many factors. I feel AG should have tightened money and run the risk of recession because I believe the coseqences of the negative wealth affect from decling mkts will be more severe but we shall see. Unfortunately, AG is boxed in at the moment due to the troubles in SE Asia. Some bulls are anticipating the next easing that would be like gas on a fire. I will briefly touch on a few of the major factors driving this bubble in the next note. Mike

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