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

To: lurqer who wrote (40165)	3/10/2001 12:53:17 AM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

If successful, you should see a semi-log chart of an Inflation Adjusted (pseudo) DJIA for the period 1800 to 2000. This isn't the first time we have seen this chart. It has a few problems or questions. First of all, half of the data is some "stock price composite" while the other half is the DJIA. Are these related? Do we in this group care about the DJIA? S&P500 might have been more generally applicable at least. Secondly, what is this linear trendline created on the semi-log presentation and what does any of this have to do with inflation adjustment? As near as I can tell this has the Dow about 10,000 so how can this possibly be inflation adjusted with respect to 1800? And, guess what folks, linear trends are at the very best rude first approximations to real trends, a reference line from which to more easily gauge variation. I've played some statistical games myself on long term trends and let me tell you that the revealing baseline was far from linear. If that mid-line is supposed to reflect the long term inflation trend ... just a guess since this is in no way clear from the context ... why would one think that a linear model of two hundred years of inflation was at all an accurate view of what actually transpired? I can imagine some interesting graphs about this data that might provide valuable information. This isn't one of them.

To: lurqer who wrote (40165)	3/10/2001 5:40:16 PM
From: EnricoPalazzo	Read Replies (1) \| Respond to of 54805

Whether or not one believes Dent's arguments isn't of primary importance. What is important is that secular bears have always followed secular bulls. Unless you believe a profound, fundamental economic metamorphosis has occurred, the current (long in the tooth) secular bull will also be followed by a secular bear. All I'm saying - is shouldn't we prepare? And if so how does a ltb&h type best do that? You know, I like your posts, and I hope you continue to contribute, but I have to say, I just don't understand this. I mean, of course Bull markets are followed by non-Bull markets. What else could they be followed by? Things that are neither Bulls nor non-Bulls? A bit too Zen for me. That tautology held true in 2000, and 1999, and 1998, and 1997, and 1996, and 1995, and 1994, etc. It wasn't all that useful then, and I don't think it is now. What do we do if there's a Bear market? I say hold. As I recall, stocks make for the best investment in almost every twenty-year period in history. I bet the people who sold in 1930 after the crash wish they hadn't, twenty years later. Likewise, I think that selling after the nasdaq plunges 60% isn't very shrewd.

To: lurqer who wrote (40165)	3/11/2001 4:19:16 AM
From: Jacob Snyder	Read Replies (4) \| Respond to of 54805

This is an important topic, and strikes at the heart of LTB&H. 1. First, those 15 to 20 year-long sideways markets were preceded by equally long bull markets. If stocks have been going up, year after year for many years, it is very difficult to convince investors to be cautious. The initial response to the early warning signs is going to be universal disbelief, and an expectation that the recent past predicts the future. This is just human nature. 2. Second, those secular bear markets (15-20 year duration) started out just like the cyclical bear markets (6-18 month-long duration, which briefly interrupt the secular bull markets 2 or 3 times every decade). And, again, the universal expectation, for the first year or two of the secular bear market, is that there will be a return to good times soon. In 1930, most people thought the bear market would be over by 1931. And, if the U.S. government hadn't done some really stupid things with interest rates and tariff wars, the Depression quite possibly could have been over by 1931 or 1932. Likewise, in 1990, virtually no Japanese would have thought that the economy (and the stock market) would not have recovered by 2001. By the end of a secular bull market, the memory of secular bear markets is gone. 3. there are some signs that would indicate we are entering a secular bear: A. high inflation, or high deflation. Mild inflation or mild deflation, by contrast, are consistent with a healthy economy. B. a freeze-up of capital markets, with no one willing or able to lend, and/or no one willing or able to borrow. C. collapse of world trade. D. a longterm trend of rising interest rates, or E. very low interest rates that fail to stimulate consumer spending. Unfortunately, all of these problems start out small, and get steadily worse, and you are several years into them before you realise that the problems may not get fixed for a decade or two. So, you won't be able to know ahead of time. There is no way to time it. The only way I can think of, to prepare, is to assume any cyclical bear could turn into a secular bear, and invest accordingly (eliminate debt of all kinds, keep cash equal to 5 years of living expenses). That means giving up a lot of the potential gains available during bull markets.

To: lurqer who wrote (40165)	3/12/2001 12:47:37 AM
From: ratan lal	Respond to of 54805

I had no problem getting the chart. Even without instructions, if I cant get to the URL by clicking on the link, I copy and paste. The upcoming 'secular bear' market per the charts looks very ominous with DOW possibly heading down to the 5000 level. I am not sure what formulae were used to extend the charts. But i would venture to say that the devil is in the details and the fluctuations from the smoothly projected charts. The other things to consider are that we are now a part of the global village with communication that is both fast and cheap. We have, I think, a better understanding of the economy. AG has been manipulating it so far to prevent hyperinflation. I presume if he has any sanity left over, then he will act to prevent deflations and recessions. And while he is at it, he will probably play around with consumer confidence. I am not saying how successful AG will be in his meddling but I am sure that the smooth charts showing the 'secular bear' will not, in reality, be so smooth. So, the most important question, what is an investor to do? I have tried technical trading with fantastic results only to be slapped silly at other times. In other words, "some a times it will work and some a times it wont". That brings up your charts. How owuld you play them? Would you consider that we are in a secular bear market now or soon will be and short the dow or naz or particular stocks for the next decade or so?? If the market si not as smooth as I predict and you get hit right after you make you investment decsion, will you have the confidence stay short for the next decade?