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To: Gottfried who wrote (80582)	12/2/2000 11:45:08 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Ron's index comparison is revealing - but, also greatly flawed... It's revealing; but not in the way you guys think it is - imho. It's not the index comparison that is revealing - as much as it is the interpretation of it & its flawed nature. ... why would you pick the starting point for the comparison; at the day of the alltime prior high on the OSX ? - of course that slants, if not guarantee's the result towards making the other returns more favorable. How do the returns look today - YTD; or how will they look perhaps 2 years from now if we started in March 2000 at NASDQ 5000 and SOX 1200+ ? They NAZ & the SOX; may be at a loss from March 2000 for years to come... would it mean 2 years from now that semi stocks, or technology are the worst investments ? Of course not; it merely means the index comparison is flawed if we choose to start the timeframe comparison in Oct 1997 at the prior all time high for the OSX, or at March 2000 for the NAZ, or SOX... Anyone who commented on, let alone engaged in the conversation concerning that flawed index comparison - shame , shame on you all for not noticing the obvious flaw in the concept ? A realistic comparison - certainly more germane to our present overall broad market negativity & near accross the board market & index weakness; would be to compare the individual index returns from the Black October 1998 period when the entire market crashed & burned. But; then the conclusions drawn are also open for discussion; as the SOX index will still be the vast outperformer - but; then the question is "was" and/or "is" the SOX the best LT investment; or is it merely the index with the most present downside; hence the worst present investment ? - and was that "Black October 1998 starting point also invalid as it was at the beginning of one of history's greatest valuation spikes in any subsector ? - ie: will it even matter if in 6 months the SOX returns to 200ish and 95% of all investors lose money ? - does it matter if the SOX was a 8 bagger; if only 5-10% of all investors were "in" at the bottom and got "out" at the top ? Or, is it more important that "margin" was at its hightest level at NASDQ 5000 and SOX 1200; and nearly overnight 75% of investors were decimated during the April NAZ/Technology crash ? Picking & chosing starting & ending time period for comparing various index returns - is basically irrelevant in any discussion involving what returns investors "actually" received - "IF" the up, or down moves involved extreme volatility - which the NAZ & the SOX certainly had... The SOX spiked from Sept 1999 thru Jan- March 2000; then crashed & burned; so what realworld validity for comparison's sake does it have that the SOX is the individual index leading performer from Sept 1999 to date; if the vast majority did not get in at the bottom, but instead got in during the accelrating top from 800 to 1200; where they were also highly margined - and now got whipsawed down to SOX 500 with their losses magnified by their heavy margin use ? And yes; there are few 10,20,30 "baggers" in the OSX - but; there are also few crash & burn to "zero" stocks as well and few $80 to $3 stories as well.... but; again - what's the point ? Anyone who even places "any" historical validity in seeking out those short-term 10,20,30 baggers is noveau bubbleonian.... the only historical supported concept in seeking out those 10-30 baggers are the traditional " emerging-growth stocks" held over long periods of time - a very traditional "Buffet-esque" type of approach - which applies to a very broad array of industries - with many of these longterm emerging growth stories within the Oilpatch as well. Certainly in this decade the vast majority will be found within technolgy; but for a cold hard reality check; the vast,vast majority of Technology IPO's brought public in this last "crest" of this historic bubble are now selling at a loss - that fact; should bring the reality of modern tech investing into perspective. If one's point is that technology and especially "emerging" technology will be the best bet for outperformance over time; that is a pretty valid point; but not if one bought into this concept in late 1999 thru 2000. It was if one bought in during 1997-1998; again - it all depends on what timeframe one wants to "frame" the discussion/comparisons within. Cyclicals; if "timed" correctly - should continue to be vast outperformers of the broad market - even over tech during their individual upcycles. By definition - they should be; as well as they should be vast underperformers to the broad market during their downside cycles - again; something that should be of no surprise.... Longer term index comparisons; if not multiple comparisons over various periods must be taken in proper context as well. As comparing a commodity oriented cyclical index to a broad market index directly - is a flawed; if not an incomplete concept. Oil price highs & lows rarely coincide with S&P, or Nasdq, or DOW highs & lows. The OSX is certainly a bit more cyclical than the DOW, S&P and the Nasdq - so broad timeframe comparisons are greatly flawed in concept. One can pick & choose starting dates to make "any" index a vast outperformer, or overperformer; it merely depends on where one "chooses" his starting date. - surely; you guys are smarter than this.... ? Cyclicals by definition will have vast periods of outperformance & underperformance... their inclusion in any investment portfolio has market timing within that subsector as a primary pre-requisite. Cyclicals are "all" about market timing; owning the Wilshire 5000 on a buy & hold basis; is for those who do not wish to market time, or pick sub-indicies, yet alone cyclical subsectors... Starting from OSX 45 back in Black October 1998 - gives us a still "Double +" thru today over a 24 month period. While it has not outperformed the SOX; for example - it's 24 month performance from that broad market selloff point is more than equitable. The OSX has also outperformed the Dow , the NAZ, the SOX and the XOI over the last 12 mos as well as YTD for year 2000. stockcharts.com You guys got hypnotized by Ron's "Fuzzy Numbers" - no wonder this country is so screwed up with this Election process - you guys believe anything regardless of how tainted the concept is - if you see it in black & white... The "Boob Tube Generation" has gotten awfully visually oriented & obviously intellectually lazy... PS: I've got some Gold charts I'd like to show you from when gold was $35 oz....get your wallets out.... In a nutshell; concerning Ron's index comparison; I guess my question is - "What's your point" ? Yes; Technology over the last few years is the best performing sector - but; that is NOT news to anyone ? It is also the vast underperformer YTD and for those who choose to chase bottoms - it "may" continue to accelerate into a historic underperformer for some time to come and even perhaps become one of the subsectors within the shortest timeframe in market history that wiped out more capital than any sector in market history for those who didn't both beat the crowd to the party & be among the first to leave as well... truly it will become the ultimate "Pigs get Fat, but Hogs get slaughtered posterchild" market event of our lifetime.... - now; that's a point... Here's another that I am sure will be lost as well: Longterm 20 year chart for the NAZ: stockcharts.com The 20+ year longterm trendline should put the NAZ in the 1200 range and the shorterm trendline of this decade long technology Bull; puts the NAZ in a trading range of 850 to 2200... 2200 "should" have been the technical "top" - again with perhaps 1500 being "fair value" on a historical basis. That "should" sober many, but it won't. One can look at that chart and easily understand why a Warren Buffet simply refused to participate in the Bubble and why a Julian Robertson just walked away & why a Soros threw up his hands & liquidated.... and why even a Youngster like Vinik shut down his fund with a 60%+ YTD return and just walked away... maybe Vinik got tired of looking at this NAZ chart ? Ron & all; if you want to look at a chart - study the one above...