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

To: MrGreenJeans who wrote (14186)	6/3/2000 7:53:00 PM
From: Gary105	Respond to of 15132

its about valuations which are way out of wack, esp among most high techs. last week someone commented that long term market could go sideways while earnings catch up to prices. bob's reply was that markets generally dont work that way. my personal thoughts are that techs generally correct during the summer, given that sales drop off because of vacations especially in Europe. also several stocks including the QQQ have unfilled gaps on the breakout.

To: MrGreenJeans who wrote (14186)	6/3/2000 9:57:00 PM
From: Demosthenes	Respond to of 15132

MrGJ, <<Is it because of a lack of liquidity in the market? Does he think the slowdown is not for real? Does he think the Fed will continue to raise rates later this year? Is it the risk of recession later on? Is it the hit earnings may take in 2001>> From what I heard and the way he said it, I think he questions the recent data. So I think that Bob, in part, says yes to your second question. Further Bob thinks AG "blew it" by not increasing margin requirements a long time ago. From today's show I think Bob believes this inflicted major damage (duh) to investors who leveraged themselves at NAZ 5000, which, more importantly, has caused major damage to confidence which will have to be restored, which will require significant time. D

To: MrGreenJeans who wrote (14186)	6/3/2000 11:08:00 PM
From: Justa Werkenstiff	Read Replies (5) \| Respond to of 15132

MGJ: Re: "If Bob thinks the Federal Reserve may or may not raise rates in June and August, if they raise rates it may only by a 1/4 of a point, why is Bob still on the bearish side." I think the issue would be the final impact of rate hikes should they occur. We may not know their impact until, perhaps, it is too late. Re: "Is it because of a lack of liquidity in the market?" Reduction of the money supply growth is an issue. Re: "Does he think the slowdown is not for real?" He questioned the economic numbers of Friday as part of a trend going forward given contradicting data points. Note also the muted bond market to those numbers as Brinker pointed out. Re: "Does he think the Fed will continue to raise rates later this year?" Who knows if the Greenman does not know? Cannot say at this point. Re: "Is it the risk of recession later on? Is it the hit earnings may take in 2001?" Most definitely. He has said and I agree that the market has not discounted the earnings impact of a recession or slowdown for that matter. Note that Cohen has said that technology earnings growth will slow later this year and that the 2000 earnings come 2001 will lead to tough comparisons. --------------- I can't speak for Bob. But I think the best way of thinking about this issue is to review the five root causes of a bear market: (1) Reduction of the growth of the money supply; (2) Rising short term rates; (3) Rising inflation and inflationary expectations; (4) Rapid Economic Growth; and (5) Overvaluation. At any given point in the market these days we had have all of these ingredients to one degree or another and in flux. But putting it all together, this is a lethal cocktail for the equity markets to swallow. And the only way to avoid a bear market recession in this environment is to engineer a soft landing. The Greenman could do it, but even if he did there would be plenty of opportunity IMO to make a market entry in anticipation of such a scenario. If he does not do it, you would definitely get a good entry point at a later date.