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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (33563)	5/17/2000 9:35:00 PM
From: RocketMan	Read Replies (2) \| Respond to of 42523

I agree about the VGY and the a/d being bearish. About the '29 scenario, as you say, the bigger problem was post-'29, when fortunes were destroyed by the bear market that followed the first drop. The '87 case, though, was a counterexample, that a bear market does not have to immediately follow a big drop. And, interestingly, AG has said that a '29 does not have to be followed by a '32. I suppose the Fed now feels they know how to avoid the mistakes that were made back then. We shall see. At this point, their recent history with irrationally generous Asian and Y2K liquidity injections, and the failure of their gradualist interest rate policies to slow the economy does not give me a lot of confidence. Concerning Prechter, I tend to agree with your statement regarding the unlikelihood of a devastating bear market. But even if we don't get hit by a comet, we still live in a dangerous world, we still have weapons of mass destruction, and there are many situations that could create problems. Aside from these unique events, though, I don't see a bear market arising for the next 5-8 years, given a proactive Fed to inject liquidity, the boomer generation (myself included) being in their peak earning years, and the budget surplus. Following that, with boomers retiring, with continuing trade imbalances, and with world markets increasingly intertwined, a super-bear may develop. In the meantime, yes, 50% haircuts in individual stocks and indices are possible or even likely, as well as 5-10 baggers in individual stocks. The latter will be a consequence of increasingly narrow advances. In the meantime, I remain mainly in cash.