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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 (355)	7/18/2000 6:54:47 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 10065

MGJ: Re: "A great deal of money comprises the consensus. One distinct possibility is that the consensus view may be the correct view." A great deal of inertia comprises the consensus. The consensus is complacent. The consensus is fat and happy with years of huge gains. The consensus is vulnerable right here and right now. When everyone believes there is no risk, that is when risk is the highest. I will say it again at the risk of repeating myself: the more people that believe there will be a soft landing, the less likely it is that it will occur. Why? If the consensus does not alter its behavior sufficiently because of its low expectations of risk, the sum total of its complacency will keep consumption going at a rate which will cause unsustainable growth to continue far longer than is safe in the face of a Fed. that is concerned with reducing growth. The time to take market risk is when there is unjustified fear of the future. We are not even close. Even if the consensus is correct, the upside is marginal IMO and not worth the risk. Re: "Money placed in the market is never risk free. Once your money is in the market it is subject to market forces beyond your control in good and bad markets." And you don't think I know this? There are times when there is more risk than normal. I see this as one of those times. I don't want the extra risk for chump change. Re: "Corporate profits I suspect will moderate not tank." If your definition of "moderation" is a miss by a penny or so or a revenue or backlog miss, the price of your stock will "tank" at these valuation levels. You may cry foul and say the earnings have only moderated but you will find the hammer of God anyway. A number of these moderating events can cause one heck of a market reassessment. Re: "The reward may be justa 5% or maybe the reward will be substantially higher." How high is "substantially higher?" How much higher before the wealth effect kicks back into the consumption patterns of the consensus? Do you think the Greenman will step aside in the face of this "substantial" upside? Re: "Just want you to clarify if you mean this rollover Brinker is predicting is not a seasonal one but more of a sustained unexpected one. I suspect you mean the latter." A decline is a decline no matter if it is seasonal or part of a cyclical bear market. I will make that judgment when we get there. All I have to know at this point is that the risk is high for a significant decline. That is good enough for me. Thanks for the thought provoking post.

To: MrGreenJeans who wrote (355)	7/18/2000 10:52:03 PM
From: bobby beara	Read Replies (1) \| Respond to of 10065

A great deal of money comprises the consensus. One distinct possibility is that the consensus view may be the correct view. Unlike 1994, Greenspan is now expected to produce a soft landing. \He certainly has an excellent track record. <<<<<<<<<<<<<<<, at the march top in nasdaq the "consensus" had 90% weighting in tech/biotech in the rydex funds and minimal in short funds, at the bottom in sept/oct 98 the consensus was to be in cash or short the market. while the in betweens the consensus is right, at the extremes, the consensus is dead wrong, finding the extremes is not always that easy. but when bulls or bears are under 10% you have a pretty good extreme.