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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (976)	9/2/2001 1:17:07 PM
From: isopatch	Respond to of 36161

Here's an article that reflects my views on todays market and where we are vs a final capitulation bottom. The founders of Comstock Partners advisory used to run the investment strategy of my old brokerage firm back in the 70s. And after following the respective track records of the 2 groups since, the Comstock guys come out looking a whole lot better - during Bear Markets - than Chuck Clough and his crew, who replaced them. In fact, I couldn't but chuckle at the sarcastic ref to the recent Merrill Lynch "study"<G> Iso comstockfunds.com 8/31/01 Commentary "There Are No Rules!! We understand that the one-day ARMS index just closed over 2 for two days in a row. That statistic has turned Ralph Bloch and other technical analysts very bullish on the market. The ARMS index closing above 2 has happened only eight times in since 1966, and all of them were associated with large gains in the stock market. We also heard a Merrill Lynch executive today state on CNBC that the Economics Dept. at the firm did an in depth study on Federal Reserve easing. They concluded that there were 8 major easings by the Fed and all were followed by the major indices rising about 30% twelve months later (we have some catching up to do this time). Our first thought when we heard this was –wonder how much it cost Merrill to do this study? And the reason we question the cost of the study is because we have charts on our wall which show all the Fed easings with the reaction of the major indices shown right underneath. It is actually pretty easy to do a study such as this and it shouldn’t have taken more than 5 minutes. All the above is accurate---The point we would like to make today is that you have to throw out all the “old” rules. Something just took place that transcends all disciplines, all rules; all of the things that turned prior bear markets into bull markets. The thing that took place is that we had a stock market mania which was unprecedented in all of world history. Don’t you remember when Cisco had the highest capitalization in the world? When Yahoo’s capitalization was more than the entire steel industry plus GM, Ford and Chrysler? When Ariba was worth more than either Dupont or Dow Chemical? When Amazon was worth almost any 2 or 3 major “old” economy stocks? When Priceline (which only sold tickets to Airlines)had a market cap greater than Delta, United, and U.S. Airways combined? When JDS Uniphase ---well you get the point. This whole thing just came to a screeching halt in the first quarter of the year 2000, and unfolded dramatically for the past 17 months. The problem is that the symmetry of this enormous bubble has not come close to unwinding, and will not end until most of the public who participated in the mania eventually swear off stocks forever. Presently, there have been only 3 months of net liquidations in equity related mutual funds. Until there are massive liquidations of these funds forcing the mutual fund portfolio managers to sell stocks in order to meet redemptions, this bear market will only have rallies that should be sold. We also believe the U.S. dollar will come under pressure, as the market continues down, severe enough to force foreign owners of U.S. stocks to eventually capitulate and sell. So, in our opinion, until the participants that caused the bubble capitulate and sell, the bear market will not end. And the problem with staying with the companies that didn’t participate in the bubble is that when the market goes down it takes them all with it."

To: isopatch who wrote (976)	9/2/2001 10:46:41 PM
From: Roebear	Read Replies (1) \| Respond to of 36161

isopatch, SURPRISE ATTACK: Writing in the US Army War College's quarterly publication, the expert warns of a surprise attack by the Chinese military disguised as routine exercises. Though many military analysts say it will be years before China has the capability to successfully launch an assault against Taiwan, a invasion attempt could come far earlier than most observers believe. That's the conclusion of a new article in a leading US military journal published yesterday. What's more, the attack could include a surprise missile blitz to "decapitate" Taiwan's military before Chinese troops are sent to occupy the island. "Storm clouds are gathering in Asia, and war over the Taiwan Strait could come sooner rather than later," writes Richard Russell, a professor at the National Defense University, in the current issue of Parameters, the US Army War College's quarterly publication . . . . taipeitimes.com Regards, Roebear