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Strategies & Market Trends : Roger's 1998 Short Picks
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To: BelowTheCrowd who wrote (14648)10/18/1998 10:27:00 PM
From: Joey Two-Cents  Read Replies (3) of 18691
 
Mike,

I agree I think AG's move is too little to late. If any one could figure the direction of these markets you'd think it would have been the 2 Nobel economist from LTCM.

I think the current problems we're seeing have been brewing for several years. I think the writing was on the wall when Japan and the US started undertaking a policy of agressive lending to fund Asian, South American and Russian over expansion. In the US add to that sub-prime lending, 125% home equity loans, Hedge funds etc.

The "experts" offer evidence of why this market will turn around. Here's my reasons on why it won't. In the next 14 months we have these things to look forward to.

1) Collapse of Russia (goodbye democracy, welcome back communism and fear in Europe. Last time this happen was 1917)

2) Continued emerging market liquidity crisis (no one is lending and more will fall.)

3)Hedge Fund Failures ( In 1929 3% of Americans owned stock in 1998 I would venture to guess that the 3% of the wealthiest in the US own most of the stock. Their wealth has been diminished decimated and continues to be)

4) Emerging Markets (Banks only now have come to the realization that its better to own a 4% T-Bill that matures in 6 months than a 50% Russian Bond that will never be paid back)

5) Y2K (Perception is reality: The media will hype this to death. Last week here in NY on WCBS they had a 5 part series on the "Millenium Bomb". IMO the banks will not loan to any 3rd world financial institution before 12/31/99, its just too risky.)

6) Impeachment procedings (The world hates US political turmoil. Also the Slickster may be just a bit preoccupied on this to give the world his full attention)

7) Round 2 of the devaluations is coming (China, Brazil, Hong Kong and Mexico)

8)Stocks are still overvalued trading at 27PE.

I've got myself covered with LEAPS, Gold Calls and cash.
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