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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Pancho Villa who wrote (4392)3/8/1998 8:07:00 AM
From: Joey Two-Cents  Read Replies (2) of 18691
 
As each company announces lower earnings (INTC,BA,CPQ,MOT)money managers will re-allocate and adjust their portfolios. I remember in July of 95 INTC warned of earnings and the market went down 10% in a month now its considered a buying opportunity.

This current mania was caused in part by Greenspan who lowered rates to a point where people could either get 2% in the bank or play the market that was earning double digit returns. The American sheep thinking their money is guaranteed have fueled this market for the last 4 years.

Only when Asia (via dumping imports here and shuning our exports) causes a slow down will we see the final blowoff. Then we'll see Abby Joseph Coehn and all the other bulls explain why it happened and how it's a great buying opportunity. Americans are living on the edge, bankruptcies are the highest ever, banks will make loans to anyone, stocks are valued at 26 x's earnings 5x's book values.

Watch for economic turmoil in Japan, devaluing of the Chinese Yuan and Re-pegging the Hong Kong dollar. Japan's national debt is almost 2x's
their GDP, their market is down 60% over the last 8 years, their govt is pumping money into their stock market to support these prices. Japan was in trouble before Asia went belly up. Second China devalued in 94 to compete, although they say they won't again they will. Finally Hong Kong's economy is based on Real estate for which theres no demand.

This game will go on until people start taking money off the table (because of declining economic conditions) and then the big blowoff will begin.
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