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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (22286)	7/26/1998 1:54:00 AM
From: Daniel Ray	Read Replies (3) of 94695

So the bull is dead? Well, could be. Sooner or later we will have a down year by some measure. Seems like the sector rotation that characterizes the recent bull legs of the market will also characterize the bear legs. One thing that occurs to me on the overall dynamics at work here: the recent sell-off was in direct response to a fundamental event ('external shock' is another term) that has no fundamental importance. Greenspan's Humphrey-Hawkins testimony was the event/shock. Now many are calling the bull market dead based on technical reads of a zillion different indicators. But unless someone makes an argument that Greenspan's comments have changed the 'present value of a future stream of earnings'-- by hook or by crook or by changing the expectations v. interest rates--it seems like this fundamental non-event will recede into the realm of dim memory very quickly, right along with 'irrational exuberance'. . . . Hey, most of you people are probably smarter than me, but I have been investing in stocks since I was 13 (in 1975) and the only way I have ever lost a dime in the markets was by trying to call short-term moves. It doesn't mean I don't still try though! And I would say that more than 90% of what losses I have had have been in trying to time a top and play the short side. I keep thinking back to the discussion about the 55-day (50-day?) rule . . . I haven't heard it mentioned this go around. Does it somehow not apply here? Or do we see the BK in September after the recent highs? Anyway, I have been mostly in cash since the end of March with only a few highly speculative long positions that I am monitoring very closely . . . You know, Galbraith is an amazing thinker . . . I actually spent an hour with him once and his insights were very entertaining and thought-provoking, and I have read several of his books . . . but it never would occur to me to rely on his advice in timing the market, except perhaps as a contrary indicator. Some day the bull will die and perhaps July 23rd was indeed the day but, I firmly believe that it will be a REAL fundamental event that ultimately kills this bull. A real event it will be really hard to predict. Best wishes to all kahunans!

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