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To: uu who wrote (24085)	8/28/2001 8:50:39 PM
From: sea_biscuit	Respond to of 25814

However, to me bear markets mean dramatic decline of quities for long periods of time (i.e. lasting 3 years or more). ... I am convinced we are not in a bear market but rather a simple correction in the continuing bull market that started in 1982). Addi: There are two components to a bear-market -- percent decline and duration. One of the more commonly-accepted definitions is that if the decline is > 20% and is spread over a duration of 6 months or longer, it is a bear-market. Large corrections are considered to be declines in the range of 10 to 20 percent whereas minor corrections are those where the declines are under 10 percent. Corrections happen in bull-markets. The analogue of corrections in the case of bear-markets are what are known as "bear-market rallies". These usually retrace about 50 percent of the prior decline. We have had two prominent bear-market rallies in the Nasdaq in the last year -- one, during July/August last year, when the index moved from 3200 to 4200 (retracing about 50% of the decline from 5000 to 3200) and another recently, from 1600 to 2000 or so (retracing 50% of the decline from 2400 to 1600). In a bear-market, perma-bulls never admit that they are in a bear-market until the time is ripe for the next bull-market to start (if the current bear doesn't end in 3 years, you will simply stretch your definition to mean 5 years, and so on, until you eventually give up). They usually throw in the towel when the next bull-market is about to start. Likewise, perma-bears never admit that they are in a bull-market, until the bull nears the topping out stage when they throw in the towel, and the time is ripe for a bear-market to start.

To: uu who wrote (24085)	8/28/2001 9:24:27 PM
From: sea_biscuit	Read Replies (2) \| Respond to of 25814

a) Idiotic tax cuts that in the final analysis mean nothing to the average consumer, and will only result in big budgetary deficits (especially with idiotic defense programs that Bush is pushing.... Addi: I don't agree about the tax cuts. We can afford to build surpluses when the economy is doing fine, which is what we did. However, when the times are bad, the last thing we want is emphasis on surpluses. Recall that in the 1930's, the government was so hung up on budget surpluses that they raised the taxes! That proved to be the last straw on the camel's back and paved the way for the Great Depression, something that even I wouldn't want :-) I would like to see a nice and longish bear-market where investors are forced to discover religion (of the financial kind, that is) but even I would not ask for much more than that! However, I do agree with you about the defense programs. One should never try to build complex weapons systems that can be defeated by simple techniques. That just doesn't make sense. But if we know where Bush came from, the emphasis on meaningless defense spending is not surprising.