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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (33515)	10/22/2000 10:21:18 AM
From: Seeker of Truth	Read Replies (2) \| Respond to of 54805

How much cash to hold is a colossal question. In times of really high inflation, bank interest rarely goes very far towards preserving capital. In such a case it's sensible to be fully invested and cash is an enemy. These days, bank interest minus income tax allows one approximately to preserve capital. I think cash is a friend in such a situation. I don't have to tell you how volatile the tech market has been lately. Manic elation is succeeded by manic despair and vice versa in quick alternation. In such an atmosphere cash helps you sleep nights, makes you a friendly relaxed person, helps you do more good with your job. With enough cash you can avail yourself of bargains when they appear. How would you like to see EMC at 80 or NTAP at 114 or etc.? These are all very recent prices, by the way. If you had cash these declines would be opportunities not disasters. So we need a cash reserve, for tranquillity and to catch bargains. That's very glib but hard to act on because when things are the cheapest our panic and the media stimulation of our panic are maximal. We tend to hug the cash in panic times and spend it when the market is up. The best way to overcome this is to observe oneself, over long periods of time. In any case there should be an irreducible minimum cash reserve. For Mike Buckley it is seven years living expenses. But the need to increase cash reserves depends on each individual's situation. Lots of luck. I personally 1. am increasing my cash reserve only because I didn't have enough. and 2. think the (eternal) Palestine/Israel crisis will be far less threatening to the stock market than the 1988 bank crisis in Asia was. Stocks were a great buy at the latter time, because they did go down sharply. Gorilla game investors floated through, calmly. By the way, I'm sure you know that when a broker sends you some junk recommending some stock that they want to get your commission. Similarly when the media bombard you about some crisis, remember that it's their business to get your attention and keep it so they can't resist the temptation to exaggerate every crisis. Also the stock market is a kind of amplifier. Trees bend noticeably in every wind but last time we looked they're still standing, eh? Some apparent maelstroms are tempests in a small pond.

To: Apollo who wrote (33515)	10/22/2000 11:45:09 AM
From: Dr. Id	Read Replies (1) \| Respond to of 54805

If there are others out there, perhaps older than me and certainly with longer investing experience than me, who have been investing for decades and can share their experience with what they have learned during worldwide disasters, that would be helpful to me. For example, it's my recollection that during the 4-5 months after Iraq invaded Kuwait, the market was in the dumps......but after the launching of Desert Storm, the market took off. Those who were actively investing then might want to share any insights or corrections to that if they wish. Apollo, My experience during Desert Storm was to get nervous and sell most of my stock as I feared a protracted Vietnam-like war. Obviously (and thankfully) I was wrong, but many were predicting such at the time. The point is that I don't think that anyone can predict what will happen in the Middle East with any real validity, except that not much will be resolved (the only safe prediction is that the Israeli's aren't going anywhere and the Palestinians will continue to be the Arab nation's political football...). I think that the bottom line is that to try to invest based on international events is like trying to time the market...to quote the (and I never thought I'd say this) smarter George Bush, "can't do it, wouldn't be prudent"!:-) In sum, we need to stick to long-term buy and hold Gorilla Gaming and consider international conflicts and events as noise that will effect us short-term but not disrupt the long-term (unless terrorists go specifically after one of our Gorillas!) Dr.Id@investmenttalkwithsubliminablepoliticsthrownin.com