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To: Robert Rose who wrote (83045)	11/3/1999 7:05:00 PM
From: GST	Read Replies (1) \| Respond to of 164684

<No need to throw the baby out with the bathwater!!> All you have to do is price in the risk factor -- that is all. Lets say you are an insurance company. No need to wake up in the morning fearing earthquakes or hurricanes or floods -- just price in the risk factor into your premiums -- very simple. But lets say you decide that, since there have not been any floods or storms or tremors for a while, there is no longer a need to fear mother nature. In that case you can just keep lowering risk premiums until you get to zero -- no risk at all. Problem is, there is a reason for the risk premium -- mother nature does not go away and so neither do the risks, even if we forget about them. In this stock market, there is no risk premium on stocks -- quite the contrary. It won't matter what form it takes, any event that causes a sudden realization that there actually are risks will require repricing the market to reflect the risks that were there all along -- meaning Nas 2,000 is at least as likely as Nas 4,000.