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Pastimes : feelies the revenge 001 -- Ignore unavailable to you. Want to Upgrade?

To: Constant Reader who wrote (271)	1/20/2000 12:36:00 PM
From: nihil	Respond to of 344

One thing I am quite confident of is the the Fed in the event of a stock market crash of 1929-33 magnitude will flood the market with liquidity (as Greenspan did after the 87 crash (which was better called the Baker crash). Thus the decline was not transmitted to the real economy. While many rich people lost a fourth or more of their wealth, they were not forced to liquidate everything and decrease their consumption drastically. Those who had substantial bond holdings recovered quite well. The same thing happened to those who were not margined in 1929-33 and held half in treasuries. Many corporate bonds defaulted in 1933, but this is unlikely to occur today. It is unreasonable to be afraid of long-term treasury bonds. A rise in interest rates (owing only to inflation fears) can cause a loss in value as happened in 1999, but this is offset by the corresponding boom in tech stocks. I cannot foresee a situation short of revolution or world war in which treasuries and techs will not act reflexively. There are circumstances in which both can prosper. Well managed, I believe the economy and market can continue to grow at reasonable rates together. My expectation is that the nets and techs can grow much more rapidly than the economy as a whole. The market (not the economy) is metastable at best. Individual stocks can jump or drop on earnings, downgrades, and rumors. A bad report in a big tech bellwether can bring all the techs down for a day or more. But overall market dips appear to create buying opportunities rather than panic selling. As long as tech earnings continue to beat the street, the likelihood of a big drop appears to me to be small. As to individual stocks, I often sell or go short if its earnings look uncertain to me. This is sometimes costly. I thought Intel was unsure but held because I knew that Intel warned when there was a significant shortfall (and it hadn't warned). I sold AMD because I believed that Jerry often lied, but of course I didn't have much AMD.