Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: cnyndwllr who wrote (7445)	9/5/2001 10:56:51 PM
From: MetalTrader	Read Replies (2) \| Respond to of 23153

ed, to continue your pogostick/ball analogy, I see both. But whether pogo stick or ball, it must bounce off something. That is the question isn't it? When and where? Surely we can find a trend that is never violated. But what would be the point of that? I can easily produce a chart that shows the next bounce at 600 on the S&P. But isn't the aspect of capital preservation important. I personally am no more interested in "bouncing" off 600 than I am of bouncing off Fifth Avenue from a twenty story swan dive. With regard to the fundamental arguments you make, allow me to challenge some assumptions. First the growing backlash against globalization is by no means a dead issue. At the highest levels in government globalization is NOT taken as a fait accompli. Just as the assumed productivity gains in the U.S. over the past decade are now being called into question so too are some other assumptions. Thirty African countries including South Africa and Nigeria signed a declaration rejecting new powers for the WTO. Trade is not as free as you'd like it to be I assure you. As one who has testified repeatedly in Washington in anti-dumping procedings on this you'll just have to trust me. A recent study titled The Emperor Has No Growth has been published which compares global growth in developing nations during a period 1960 - 1980 when most developing countries had restrictive and inward looking economies with the period 1980 to 2000, an "open" period. Using the UN's concept of a human development index the annual growth rate slowed in ALL countries, developing and developed. We can argue whether the index is relevant or proper..but to millions around the world it is seen as relevant. Free trade and globalization isn't a slam dunk. Multi-year returns in equities have been the best place to put assets? Depends on your multiyear. If you began your multiyear period in 1965 you waited until the 1982 to recover your investment (Dow Industrial Average). That is simply too long to remain passively unprofitable. Buying in 1905 meant 1944 was the year you really started to make money (non inflation adjusted of course)A period just as incredible in technological advancements in transportation and communication. The current bull market is a new kid relatively speaking. Be careful with assumptions. There are some very long periods of stagnation. With regard to Oracle being okay to lose 36% I ask why? And why is Oracle different from Poloroid, Xerox, Digital Equipment, IBM in 1970? Is it possible Oracle never recovers? I am not competent to judge whether Oracle will be a continued leader or will be supplanted by someone new. I'll let the market tell me. I challange your comments mostly because it makes ME think. Also I was trained in a fundamental investment environment and found it so flawed when challenged, I can't stop <g> mt

To: cnyndwllr who wrote (7445)	9/6/2001 4:40:37 PM
From: Raymond Duray	Respond to of 23153

Hi Ed, Your latest comments, especially your willingness to accept a haircut on an ORCL speculation, reminded me of one of Warren Buffett's lines on investing: "Rule Number One: Never lose money. Rule Number Two: Never forget rule #1". In other words, if you are anticipating ORCL to trade down 36%, why hold it? Keep in mind, that in order to break even from a drop from 14 to 9, you must have a gain of 55%. 36....55..... the math is compelling to me. I only want to hold equities I expect to go up. The most important, in my view, are the lessening of world trade barriers and the increased economic and political freedom in many heavily populated and previously dark corners of the world. You might want to take that matter up with the U.S. Trade Representative who just imposed a 19.3% tariff on Canadian softwood. ;) Those of us who are baby boomers are creating a demand for retirement assets that raises the price of those assets INDEPENDANT OF THE HISTORICAL VALUE OF THE ASSETS THEMSELVES. I felt much the same in 1998. At that time, I thought that the cycle of inflated value due to too much retirement money chasing not quite enough equity would last until 2006. What I didn't take into consideration was Wall Street's amazing ability to print worthless stock certificates to meet and then finally exceed demand. I believe this gives an entirely different twist to INDEPENDANT OF THE HISTORICAL VALUE OF THE ASSETS THEMSELVES. So, what I see is way too much junk equity laying about. It'll take a while for us to process all this through the bankruptcy courts, the de-listings of the fallen angels to the pink sheets, the M&A grist mill and the Promethean Fund style convertible preferreds that will continue to slice away at the holders of equity mutual funds and the pollyannas who still think that there isn't still a lot of painful re-rationalization of values still ahead. Re: That's also why I dimly suspect that you have to combine TA with FA to sort out the "real" economic influences from the psychological influences in the market. IMVHO, in this sort of range bound market, the advantage is to the TA guys. Just like in playing pedestrian in mid-town Manhattan, there are two kinds of players, the quick and the dead. If we accept as a premise that fundamentally profits drive equity valuations, then we are the bouncing ball heading downslope as far as the averages are concerned. It's the clever money that can recognize how to play the bounces. It is the really clever money that manufactures the news and rumors that fuel the bounces. Regards, Ray :)