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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (11377)	1/21/2000 9:22:00 PM
From: Investor2	Respond to of 15132

Re: "You might also want to include the Vanguard GNMA price and change over this period." I do own some VFIIX, but I put the proceeds from the 1/12/2000 sales in a money market account. I decided that the money market account interest over a period of 9 days is insignificant when compared to the other numbers. If the money market interest becomes a significant part of the equation, I will add it to the spread sheet. Re: "Also, you might want to show the current price and % change of the Russel 2000." I'm only keeping track of price changes for the positions that I actually sold (or will sell). Best wishes, I2

To: E_K_S who wrote (11377)	1/22/2000 8:59:00 PM
From: E_K_S	Read Replies (2) \| Respond to of 15132

Another opinion that appears to show caution... (http://www.decisionpoint.com/TAC/DohmenHotline.html) Bert Dohmen's Weekly Hotline January 21, 2000 "ABBREVIATED VERSION" Substantial portions deleted in fairness to paying customers. Depending on what area of the market you invest in, this was either a week for cheering or for crying. The Dow Industrials lost a hefty 471 points in the 4-day week, while the NASDAQ Composite gained a big 171 points. Although the market has discounted an interest rate hike in early February, the next scare will be actual inflation. Oil prices continue to rise, and are starting to effect industry. I predict that commodity inflation will be the topic of concern this year. It will be very much like 1993 and 1995-96, when commodity prices were rising and economists warned of higher inflation. As I predicted, the inflation never showed up, but it did produce Fed interest rate hikes which shook the markets. The 1998 emerging markets debacle was caused by the Fed. As the Fed pushes interest rates higher, costs to businesses increase as well. That increases inflation pressures. My final concern is that the yield curve between 10-year Government Notes and 30-year T-Bonds has just inverted, meaning that the shorter-term instrument now has a higher yield. It's only by a very small amount, but it often brings on problems. For example, in the steep market decline of 1998, which started on April 23 when I gave my sell signal, and ended in early October, this yield curve was inverted virtually the entire time. Yes, the yellow light is flashing. When the market makes an intermediate-term top, you will see interest rates declining as bonds become an excellent alternative to risky stocks. At that time, we will want to shift into the Zero-Coupon T-Bond Funds which should do very well while the stock market is taking a beating. For example, in 1998, from the April stock market top to the early October bottom, one zero-coupon fund gained more than 27%. Not bad for a T-Bond fund. On the positive side, there's still plenty of liquidity in the system. Therefore, I don't expect any big, prolonged bear markets. We'll just have bear markets in those sectors that soared to the highest extremes. We've seen one of these sharp corrections at least once each year, and this year will be no exception. With the NASDAQ Composite closing this week at a new record high, it's tough to give a sell signal. However, there are caution flags flying. The last two days, volume on the NASDAQ was at an all-time record high each day. Yet, the index did not rise very much. High volume with small gains occurs at turning points, as the big professionals sell into the buying demand from the public. The majority of stocks are declining, as we can see by numerous technical indicators. It's obvious that after the big 3 -month upmove in the NASDAQ, it needs a rest. It could start as early as next week. Next Friday we get the fourth quarter GDP. I predict a big rise of 5.6%. That will shake up the bond market again. Conclusion: it's time to become very cautious. We've made huge profits, some in excess of 75%, and should not be so greedy as to want to get the last dime. It's always good to leave some money on the table...." EKS