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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (47314)	5/4/2000 3:25:00 PM
From: Harvey Allen	Read Replies (1) \| Respond to of 94695

Soros: U.S. May Be in Bear Market Filed at 3:06 p.m. EDT By The Associated Press LONDON (AP) -- Globe-trotting financier George Soros warned on Thursday that the recent erosion in U.S. share values suggests that the United States is already in the grip of a bear market. Soros, who has amassed a fortune speculating on currency fluctuations, also criticized the European Central Bank for not intervening in currency markets to buttress the sagging euro, which plunged to a new low against the dollar in early trading in Europe. ``We probably are in a bear market, only we don't know it yet,'' he told a group of journalists at the Association of American Correspondents in London. ``I think one has to position oneself accordingly.'' Soros' comments came in the wake of shake-up last week at Soros Fund Management, his $14 billion hedge fund company. Two top managers left in the wake of a double-digit declining performance this year. However, Soros offered hope that canny investors could still profit in spite of the overall slippage in share values. ``In any bear market, you have pockets that go against the market. I've made quite a bit of money ... in bear markets, in special areas,'' he said. Soros said he is keeping many of his investments in the form of assets that are easily converted into cash. He also suggested that the U.S. economy could be at risk because many brokers and traders are not old enough to remember the last severe financial downturn and prolonged recession. He expressed mild surprise that so many investors and market professionals remained optimistic in spite of the volatility and decline in many U.S. stocks. ``The market today is dominated by much younger people who have not experienced a bear market,'' Soros said. He noted that retail investors, whom he described as ``the little guys,'' were continuing to buy shares, particularly through mutual funds and in high-tech companies. Soros is not the only major investor to take a dim view of the recent frenzied demand for shares in technology companies. Billionaire investor Warren Buffett said last month he would continue to shun technology stocks even though they showed some of the biggest gains of any sector last year. In a wide-ranging discussion, Soros also admonished the European Central Bank for not intervening to support the plunging euro. The common currency used by 11 European countries has retreated steadily from a peak of $1.1886 reached during its first day of trading on Jan. 4, 1999. It fell to a record-low 88.45 cents in early trading Thursday before rebounding above 89 cents. ``I sense a great reluctance on the part of the (ECB) authorities to mess with the markets,'' he said. ``Their intervention would be extremely credible since we are clearly in overshoot territory, and there is reason for it to continue. But you could short-circuit it by intervention.'' Soros blamed some of the euro's weakness on what he described as inefficiency and selfish nationalism among the politicians who run the European Union. He argued, for example, that EU members dole out aid to Balkan countries to help themselves more than to help the aid recipients. Still, Soros took care to emphasize that the euro's decline does not constitute a crisis -- so far -- for the countries that use it. nytimes.com