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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (1878)	2/10/2001 7:55:41 PM
From: westpacific	Read Replies (1) \| Respond to of 74559

-"Something different to economy this time" - Greenspan -Lowest consumer confidence since 1996 and sharpest downturn with back to back quarters that have been seen in 50 years. -Lending - tightens at fastest rate in a decade. -Fed 100pt cut steppest since deep recession in 1981 to 1982. -Layoffs - in Jan. 270,000, up some 678% over Jan. 2000. 'ISI Group' -Default rate amongst speculative grade bond issues is approaching 9.5%, that would be the highest rate since 1990, when defalts surged in a recession. -For investors, the only important question is how much of the bad news, present and still to be accounted for, is in the market? Not very much, say Jay and David Levy, father and son and a really bright and perceptive pair of economy watchers. In their Levy Institute Forecast, they contend that "investor expectations and where profits are headed" are at considerable remove from from each other. They anticipate earnings will be worse than expected in the first quarter and will 'in all probability nosedive in the second half." And, for good measure they add that "2001's fourth-quarter earnings decline could be the steepest in postwar history. And 2002 may be scary." 'Barrons,02/12/01' -During the first week of January, investors poured $67.7B into money-market funds. That's the largest increase in three years and brings the total assets sitting in money-market funds to an all-time high. $49B of that money came from institutions. 'Investment Company Institute (ICI)' -Caught some statistic that new home mortgages were for upwards of 85% of purchase price, in addition there were record numbers of refinancing to pull equity out of real estate investment. Try to find the article later, but interesting trend. Saying something to the tune that consumers have become accustomed to utilizing stock market gains to pay bills and fuel their spending. Anyway, just more tidbits to ponder. Short, live long and prosper. West

To: TobagoJack who wrote (1878)	2/10/2001 10:43:37 PM
From: FR1	Read Replies (1) \| Respond to of 74559

Jay, thanks for your reply. It fills in the picture a lot for me. There were two questions I forgot to put in: 1) What about chinese stocks? 2) What do you see as the best play for returns right now. On Chinese stocks, I bought some CHU and CHL some time ago and, fortunately, sold in time for a little gain. If there is tremendous growth in China, you would think there would be good gains in some of the Chinese stocks. It kind of scares me, though, because I wonder if the rules are as strict in China as the US. If not, it seems more likely for stocks to be manipulated. It is hard for me to figure out if you are in or out of the market: This is going to be so much fun, providing months of entertainment, and maybe life times of financial gain. Cash now is not the king but everything. On the one hand, if you are out of the market, then you would not be making life times of financial gain. If you are in the market (even short), then cash would not be your position. So I am not sure where you are (maybe both?). Personally, I still think there will be recovery (even though we don't see it right now). The FED has the power, means and will to make it happen so there is some truth to the big momo "don't fight the FED". IMHO, optics and broadband semis are one of the few areas that have the potential for rapid growth. So I have things like AMCC, JDSU etc with puts under them. This way I don't lose much as the market tanks (like now) and I am there when it turns up. I lose the premium is all. I have to decide what to do at next weeks expriation. I guess I will either buy more puts or sell everything and buy great leap calls. What do you think?