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To: William H Huebl who wrote (3968)	3/10/2001 8:47:11 AM
From: robert b furman	Read Replies (2) \| Respond to of 4583

Hi Bill, That is definitely one possible scenario.Not only is it possible - it will most likely be the outcome most OFTEN talked about. It is that scenario that always gets emphasized at the bottom - because it is the most effective in pushing the weak holders out at the bottom. All I see going on in the Naz is an exchange wide bottoming out of prices. This time there is'nt a new rotation. Any of the stocks that were immune from weakness in price before are getting there invitation to the bloodletting. To me that is a significant sign of a bottom being put in: The generals are now getting shot:Orcl,Csco,Amcc,Jdsu - the list goes on. What is now happening to the generals, happened to my favorite sector back in October : Cohu hit 12 5/8 it's now @ 15-16, Nvls hit 26 1/2 its now @ 40-41. When all sectors bottom out in unison, after the fear created by the price erosion of those stocks that everyone knows "don't go down" i.e. Csco Jdsu etc,then we will have put in THE BOTTOM. THE BOTTOM will be marked by a VIX spike into the 50 -60's.Adv /decl will be out of whack 1 - 3 or 4. New highs will be nonexistant except for a lucky merger or aquisition and new lows will pop up into the 400 - 500 range for several days.The Big Kahuna Thread will have 150 plus posts vs the 20 or so on a bullish day. Bears will gleefully declare that all stocks are going to zero - powered by the blind glee of greed boiling in their blood. Brokers will hate coming into work, as the margin lists will be on their desks and uncaring forced liquidations will be the chore of the day.Even for the accounts that they have nurtured for years!! I personally think it will happen soon and most likely very close to April 15 th when a lot of money has to come out of the market to pay for last years big gains taken. Those who took big profits hopefully didn't immediately reinvest - if they did their tax bill might exceed their equity.gulp I don't think this is the end of the digital revolution.I think it is a well deserved shakeout from a blow off top - the likes of which we've never seen before.Just common sense says the shake must be deep and/or long since the top was so high. I believe more chips will be used in the next 3 years than were used in the past 5.Some players won't make it.Just as Motorola sold out their D-ram to Micron in 98 , this time Hyundai will sell to someone thru bankruptcy liquidation court. It will leave fewer, stronger, more efficient manufacturers.This is creative destruction and the most efficient utilization of resources - it is not pleasant for those who lose,but it is a win for those who succeed. Those with margin calls at the bottom will lose opportunity - those who buy in the face of fear will be up 30%-50% within 50-90 days.Someone's loss will be someone's opportunity.Mr Market makes it so - rule of the jungle. It is the way of the market.I have been in all corners.I have had to regroup and start over, after looking at my errors.I don't need to see the world fall apart to rationalize my errors.I try to accept them and keep my eye on the big picture. My big picture is we are going thru an inventory correction.Manufacturing pushed overbuilding all the way thru the year 2000. It was the execs wanting to maximize their annual bonuses.In my business it clearly became soft in October/Nov/Dec.Our inventories became bloated. I think I was lucky in seeing it 30-45 days before most dealers.I'm actually out of models and am beginning to reorder/trade for the missing models. Many dealers are still getting killed by floorplan costs. I think the car business gets lousey first because we sell durable goods with thin margins and high inventoring costs.I think the electronics industry is just coming out of the ether regarding their stuffed channel.The delay in their recognition is the result of fat margins - they make 50% gross - auto's make 7-9% gross.I'd keep the plant going another 2-3 months too, if I was cranking in the gross they're getting. Sooner or later - a slow down cycles thru all sectors.Greenspan's rate hikes have been felt for a while for those who have been looking.For those who have been fat and dumb - well the 2x4 is hitting them now. My dealership's floorplan rate dropped last month from 8.4 to 7.3 percent. That helps profitability.These reductions will continue and additional relief will be enjoyed. Smart corporations that have expansion plans on the books - will implement their plans when money gets cheap.As you point out so well with your SCY it's getting cheaper.That implementation will continue a renewed less robust prosperity JMHO. Some heads will fall and disappear.Some not so sharp businesses will suffer and recover.Other sharp aggressive companies will implement and take advantage of the cheap money and prosper.We are simply at that sorting out stage now - and probably will be for another 90-120 days.This is march - rate reductions take at least 6 months - they were cut in January so July / August will have a return of security and maybe a splash of even optimism. The dotcoms that bought artworks with their IPO money are getting what they've got coming to them. Those who invested in the mania,into business models that didn't earn profits are getting what they've got coming to them also. That does not mean real businesses with real assets and real products are going the way of dotcoms.Fortunately for the value investor(long term positional trader)those real businesses will be painted with the same brush as the dotcoms.It's bad news for the long term holds we didn't sell - but it will be great news to be able to buy great stocks at cheap prices.I for one have been dreaming about selling my Cohu(which I did - not at the top darn it - before actually) and buying more shares of Intel and Novellus at the next market bottom.If it takes 1,3,5,11 years for Intel or Novellus to level off at historical valuations - I'm OK with that.It will simply be a great long term investment. Buy em cheap - hold em long and when you're counting your profits twice a day and smiling - recognize it as greed and sell em. These bottoms come along every 2-3 years - hitch another ride. I do not think the modern world is disappearing.But some day soon it sure is gonna feel like it. On that day I hope to be buying.HEHEHEHE Bob Thank you for all of your very solid stable advice over the last several years. Balance is the most difficult perspective to MAINTAIN over the long run.