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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (68733)	10/6/1999 6:48:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 132070

BGR, you haven't read my previous post carefully enough it seems...LTCM's strategy was to bet on the return of efficiency, i.e. the tightening of credit spreads that their quant models said were to wide. instead, the inefficiencies became even greater, as spreads widened further. as to being short or long, i agree that in the very long term it is more profitable to be long...no doubt about it. but to go long at the height of a speculative mania is rather foolish. as history has proven, the "long term" can become very long indeed once a bubble meets with it's inevitable demise. human nature being what it is, how well do you think people will take a 50% or 70% haircut (which is what happened to the 'nifty fifty' of the early 70's, a loss of 70% on average at the lows. it took only 15 years to recoup it.)? i'll tell you: most will sell out at or near the lows, when they should be buying. that's what happened in '74 and it will happen again. hb