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To: elpolvo who wrote (26993)	7/29/2000 5:17:11 AM
From: Raven	Read Replies (1) \| Respond to of 35685

hey, polvito, i'm up, too!.....lurqer, i really enjoyed your posts as well as previous ones...thanks for sharing your thoughts as i always look forward to them..

To: elpolvo who wrote (26993)	7/29/2000 8:58:13 AM
From: Clappy	Read Replies (2) \| Respond to of 35685

Word Ball: You don’t have to fear defeat if you believe it may reveal powers that you didn’t know you possessed. — Napolean Hill

To: elpolvo who wrote (26993)	8/26/2000 2:05:29 AM
From: lurqer	Read Replies (3) \| Respond to of 35685

the secular bull is still intact till at least 2008... no? You deserved a more prompt answer, but I ran off into the back country of southern Utah...It was great! Short answer: Maybe - more or less. Longer response. Maybe. I know your a big fan of H. Dent, so that's the source of the maybe. Dent's demographic theories, at this point, are just that - unproven theory. Now don't get me wrong; I haven't found anything better than Dent. I'm just saying "Don't bet the farm!" on what is still a theory. More or less. My last "real job" was in simulation - so let's spin some scenarios. As a basic premise let's assume that Dent is fundamentally correct but there are other perturbative factors. (All of this is just my musings and are exhibited on a FWIW basis.) Scenario I Dent + money supply. Just for the sake of argument, let's say that Greenspan, given his age, doesn't seek another term. Also let's posit that the next Prez (Bush or Gore) in an effort to get re-elected in '04 prevails upon the new Fed chairman to pump the money supply up so that by '05 inflation is a problem. To fight this inflation the Fed not only raises interest rates, but also (and different from the Greenspan Fed this year) significantly cuts the money supply. The markets collapse - not 20% to 25% but 40% to 50% - because of the "tight money" policy. With inflation curtailed the fed, somewhat belatedly eases and the market rallies. But the damage is so bad that the market doesn't get back to its early '05 high before the '08 Dent demographic wave kicks in. So you end with a massive multi-year Head-and-Shoulders pattern with only a shoulder, not a peak in '08. Then, seen from the perspective of '14 (inside a secular bear market), the decline started in '05 not '08. Scenario II Dent + P/E's Just like the "real" money in bull markets is made by P/E expansion, the damage in bear markets is caused by P/E compression. It's very interesting to consider the P/E's of the last secular bull market - the one that ended in '72. Now I was 'round and watching that market - but not as closely as I now wish. It was the '60's - the era of sex, drugs, and Rock 'n' Roll; I was young and "distracted". So my recollections may be a bit off but FWIW here's what I recall of the GO-GO market. By '66 the P/E's were sky high and the market reached a peak. From '66 to '72 the market sawtoothed - i.e there were rallies and declines but the primary result was a sideways market. True the peaks of the rallies were higher, but only if you didn't account for inflation. The inflation adjusted peak occurred in '66. It's as though the P/E's had expanded up to '66 and then just held until '72 when the Dent demographic wave allowed them to compress. If a similar six year P/E plateau were to occur again the market would also plateau from '02 to '08. One could still make a lot of money in such a market, but much more importance would be on stock picking because the market as whole would be "topped out". The secular bear in this scenario still starts in '08, it's just that we don't go up all that much between here and there. Scenario III Dent + New Economy + BB (Boomer Behavior) Let's say that major technological innovation not only continues but accelerates. Moreover let's assume that Boomers (in general as opposed to the ones that read SI) violate Dent's "plan" and work later in life. There is some evidence for this in that they have had their kids later. These factors would tend to extend the bull beyond '08 to say '10 or later. I like Dent a lot, but I've noticed that he seems to be more accurate in the long run than in the short. I suspect that is because there are "other factors" in play that tend to "fuzz" the predictions. So I try to use Dent as a schema and then let events as they unfold fill in the details. In all of these scenarios I've assumed that Dent is "fundamentally correct", but without much effort it's possible to get a range of years as the peak of the current secular bull. For myself, this is the last bear correction that I'm sanguine about. From now on when a bear starts I'm going be wondering if (in California vernacular) this is the "big one". BWDIK (insufficient - always insufficient) lurqer