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Non-Tech : Derivatives: Darth Vader's Revenge
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To: ahhaha who wrote (471)10/13/1998 4:20:00 PM
From: Worswick  Read Replies (1) of 2794
 
I do look forward to your posts. Very astute. I even agreewith most of what you say about Japan.

Ref yours, "..The problem is that once the intermediate bottom is in place, the best we can expect is a sideways to up ledge for several months before another skid. This is what happened after '29. It wasn't the October crash that did the most damage, it was the market persisting down. For 3 months after the Nov-Dec bottom the market rallied before another slow grinding downside move ensued. In 1930 the market corrected back up substantially until April. Gave people plenty of time to get out. The sentiment was one of greed and resentment for what was owed, so they held and down she went. As this process continued, even the smart money got fooled. Jesse Livermore went in and bought too early on borrowed money in 1931. The market proceeded down to absurd undervaluation cleaning him out.

You can't anticipate these things. Don't use margin or leverage."

My belief exactly.

Today Oct. 13, 1998 Julian Robertson, he of the big derivative portfolio, said, that essentially... the best is yet to come here. Of course he didn't really say that. He said something like keep the faith...we ain't out of the valley yet.

Ref another of your posts.."Finally, what does capital draw into itself mean? Liquidity trap? People are so fearful that they'd rather keep their money in banks where it is safe? In a safe big Japanese bank like Sumitomo. In a sock? Well then the central banks are going to have to generate a lot of currency to accommodate the salting away".

Basically, you took us through 1931.... but keep your eyes on what happened in late 32' and early 33. That was when Bernard Baruch took $3 million home with him from the bank in flour bags and hid it inside his stuffed ducks.

With best wishes-

Clark

My bes to you


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