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

To: MrGreenJeans who wrote (348)	7/18/2000 5:16:30 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 10065

MGJ: Re: "Is it not possible the affects will be more moderate than some, on this board, believe? and Is it not possible the rising rates will create a stronger market in the months ahead if inflation is sniffed out?" Anything is possible but that is only half the analysis. The other half of the analysis is to ask oneself if it is discounted by the market. I say such an outcome is the consensus now and that it is discounted in the market. Unlike 1994, Greenspan is now expected to produce a soft landing. AJ Cohen said the other week that the market has fully discounted the good news. Her target is 1575 for year end if everything goes right. You can take that 5% if you want it because it is not risk free. Backing up a bit, I assess your scenario as possible but not probable. You have to see the economy jump through Justa's three hoops: (1) reduction of growth to a sustainable level, (2) tame inflation and (3)little or no damage to the growth of corporate profits. Those are three tough hoops and the reward is 5% in a diversified portfolio. The downside could be 20% or more if you miss a hoop. Lurking in the background is this energy thing which is totally unpredictable as stated previously. If this moves the wrong way, it could be a killer. Now I go over to the bond market and I see a tax equivalent yield for for me of over 10% currently with price appreciation a probablility. I see over a 7% tax equivalent yield in a municipal money market. Looks sweet to me!!! I have said from day one of this year that this will be a trader's market. I expect this to continue at best. At worst, I expect to get the Brinker rollover.