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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Chris who wrote (11842)7/12/1998 6:35:00 PM
From: Jack T. Pearson  Read Replies (1) of 42787
 
Chris,

You are undoubtedly correct in urging caution because of the elections in Japan. But the effects are not obvious. There are many factors at work here. One of them is the flight of capital from Japan and the rest of Asia (except, possibly, China). This could have a positive impact on the US markets.

The following factors all have different cycle times for their effects to be felt in the US markets, and probably a wholly different set of cycle times for their effects to be felt in the economy as a whole: Fear for the long term future of the Japanese economy, flight of capital, reduction in Japanese orders, and increased competitiveness of relatively lower cost Japanese goods. These different cycle times and the different magnitudes of the effects are some of the dimensions to a complex, multi-dimensional situation.

In conclusion, if someone were to predict the US stock market will rise or fall on the news of the Japanese election results, and that prediction proves to correct, I will conclude that the person who made the prediction was more likely lucky than smart.

Jack
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