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To: H James Morris who wrote (127582)	7/1/2001 1:31:29 PM
From: craig crawford	Read Replies (1) \| Respond to of 164684

>> We talked about the Shanghai B's not long ago. Anyway, China's not bullet proof << never said it was. i said they will have their setbacks along the way, and they will be opportunities. >> If we do go into a global recession then who's going to buy all of their exports? << if? we are already in one and it started a few years ago. obviously the theory that says if the u.s. sneezes the world catches a cold has some merit to it, but i do think that some economies can weather the storm better than others. i subscribe to the notion that in the next couple of decades the world isn't going to revolve around the u.s. in the way we arrogant americans would hope. look at japan. everything revolved around japan in the 80's. they were scooping up property everywhere and people thought they were going to own california. obviously that all came crashing down and our markets exploded even in the face of the second largest economy faltering for a decade. i believe the same could happen again. i believe the u.s. markets could falter and everything else will go down with it for a while, but then we won't come back so fast and other countries like china (maybe even japan again) will take the stage once again. just remember every one or two hundred years or so a major superpower loses it's status and a new one emerges. remember how powerful and pervasive the british empire used to be? now they are peons in the global scheme of things. the u.s. took center stage in the last century, and we didn't have to rely on the rest of the world for much of our growth. we did most of it internally as isolationists. my view is that china has a great shot at doing the exact same thing. growing into the next great superpower, while we become another britain. >> Interesting, I told you several times in the past I'm not interested in gold, because of its go no where spot price. << yes i remember, i'm young and my memory is still good. >> Well, until this morning I hadn't noticed that the elephant funds, and the hedge funds have been moving into gold this last 2nd Qtr << that's because you weren't paying attention when i mentioned it. Message 16000127 >> So Craig, now you've got my full attention. How are you playing Gold? Individual stocks? Funds? or Indexes? << for starters i'm going to close out my nem puts and hm calls soon. then i'm going to do nothing. i'm bullish on gold longer-term, as in the next 3-10 years, but it could easily have one last nasty shake-out before it's finally bottomed. bear markets rarely give up easily, just like bull markets go much higher and much further than anyone expects, bears tend to do the same on the downside. stupid gold bulls can't even fathom gold sinking to $200/oz, even though it's slid from $873 to $252 already. what's another $52 measly bucks after it already slid $600? the best bet on gold is probably to just sit and watch it out of the corner of your eye. of course there are 3 possible scenarios that could unfold. 1) gold has put in some support for the last couple of years in the low 250's. it's possible that it is just basing for a long while before an advance. if you were to buy now it might just sit there in a range for another year or two before finally breaking out. 2) gold might have bottomed in april along with the nasdaq and it is sawtoothing it's way higher making higher lows and higher highs in a new early stage bull market. i guess now would be a good time to get in if that's the case. 3) the latest run to $300 was a major fake-out sucking in the last of the diehard gold bugs before we have one final steep panic sell off to new lows on heavy volume. that would be the ultimate bottom like we saw with oil in late 1998 near $10/bbl. futures.tradingcharts.com there would be all kinds of media attention and a big uproar as it plummets. people like victor will jump up and down taunting me and calling me a fool for ever thinking gold was near a bottom. that will be the time to buy in a big way. i can't tell you which scenario will unfold, the only thing i am confident about is the time frame. after going straight down for 20 years, gold is within 2-3 years of bottoming if it hasn't yet. you could buy some now and you will do just fine a few years out, even if it tanks to $200 or lower first. but i definitely would not bet the ranch on gold at this point. i would advocate maybe taking a small position now if you're not trying to be a market timer so you can keep an eye on it, and then keeping your powder dry for a break below $250 or a break above $300. i kind of liken the gold situation to this coal stock for instance finance.yahoo.com you could have bought this coal stock when it hit the bottom of it's range just below 20 or maybe when you saw people start to panic when it broke support and slid to 15 in 1998. well it obviously kept sliding hard in a major panic that took it to 5 bucks. obviously unless you're timing was good you could have bought something that looked cheap at 15 and been down 66% a couple of years later, making you look like a total fool. but in the end it went over 38, and when you add some dividends you could say closer to 40. so if you time it perfectly you could have made 8 times your money off the bottom, but if you had not much in the way of timing at all you would still have better than a double in a 2-3 years. not bad considering you won't be making 8 baggers on most tech stocks in the coming years.

To: H James Morris who wrote (127582)	7/1/2001 3:28:12 PM
From: craig crawford	Read Replies (2) \| Respond to of 164684

another thing i find interesting is the seemingly universal phenomenon where markets tend to fly in the face of fundamentals near major market turns. there are numerous examples of this. i will cite a few. back in the late 1920's most world markets had topped out by 1928. and a few made it until the start of 1929. only the u.s. kept going until the fall of 1929 and then we all know what happened. just like we had a scare and correction in the fall of 1997 and 1998 and then the fed cut rates, back in october of 1927 the market corrected and the fed had cut rates, leading to the final blow-off. we saw the same phenomenon this time around. many countries around the world topped in '97/'98 due to the asian/russian/latin american crisis. of course we became the last bastion of strength and the only good place to invest so money flowed in and we had a blow off top. same thing in 1987. world markets crashed in the fall of 1987 including japan to a lesser degree, but japan shrugged it off and had a huge blow off top for another 2 years while the rest of the world recovered much slower. in october 1979 newly elected fed chairman paul volcker changed the fed's policy from targeting interest rates to targeting money supply. he said he was going to break the back of inflation. didn't stop gold from going on a manic binge heading into 1980. greenspan hiked rates several times starting in 1999 and the techs still went on a blow off binge heading into 2000. time and time again you can find examples of where the cracks in the system were starting to appear, or there was clear evidence of a change in fundamentals, yet momentum was so strong the markets ignored the obvious and proceeded to continue the other way. that is another reason i don't want to get too bearish on stocks or too bullish on gold. inflation is going to come back. trust me on that. the seeds are sown and they are just showing signs of sprouting. everyone should forget about financial assets for the next 10 years and learn all they can about inflation and hard assets. but that doesn't mean the market won't ignore the signs and confound everyone for a while in the meantime. in other words the dollar keeps confounding everyone and going higher, gold can ignore signs of inflation and go lower, etc. gold probably won't really take off until 8 or 9 years from now. it will rally before then, but it probably won't top out until sometime around 2010 or later.

To: H James Morris who wrote (127582)	7/1/2001 7:16:59 PM
From: Victor Lazlo	Respond to of 164684

<<China's not bullet proof. If we do go into a global recession then who's going to buy all of their exports?>> Craig

To: H James Morris who wrote (127582)	7/1/2001 7:18:54 PM
From: Victor Lazlo	Read Replies (1) \| Respond to of 164684

<<The best-performing fund category was gold, a safe hedge in a bearish market up 19.1% for the Qtr.>> forget categories; the best performing FUNDS were small cap value. Who buys categories?