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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (32266)	11/4/1999 5:02:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Haim, thanks. oh, something that just crossed my mind...does anyone remember a practice that was fashionable during the Japanese bubble, known as zaitechu? it involved corporations buying up stocks of other listed firms with their free cash flow and sometimes using debt, and the other co's returning the favor. that way stock prices were driven higher, and everybody had extra profits to show for it. i sometimes wonder if the use of pension fund surpluses to beef up earnings and the constant stock buybacks using debt are not a slightly more sophisticated U.S. version of zaitechu. these are very common practices, as is the selling of put options on one's own stock (Dell e.g. is said to derive significant profits from this). i'm just mentioning it to make everyone aware that such techniques tend to work in reverse during bear markets, in other words they tend to deepen both extent and duration of the bear market when it comes. of course why would anybody even want to think about a bear market right now? <ggg> regards, hb