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To: High-Tech East who wrote (46513)	12/2/2001 4:09:59 PM
From: High-Tech East	Respond to of 64865

... another interesting take from Ken Fischer at Forbes Magazine ... although I think I would have to see a few weeks above 1250 or 1300 before I might think the bear is over ... 1250 would be 50 % retracement from the drop from the peak around 1550 to the low around 950 ... ... Note: the S&P 500 Index (the $SPX) closed at 1139.45 on November 30, 2001 - after it closed below 1130 again on Wednesday, it has now closed above 1130 for two consecutive days ... Ken Wilson Bottoming Out Kenneth L. Fisher, Forbes Magazine, 12.10.01, 12:00 AM ET The year-end Investment Guide presents a great time to assess the overall market and where we are headed next year. I've been fully bearish throughout 2001, starting in January. The spring 2001 rally caused many to turn bullish. Not me. In the Sept. 17 issue (which was in your mailbox two weeks before the issue date) I expressed confusion that a market bottom was taking longer to arrive than I first envisioned. I then said the bottom might not be "until the end of the year or, heaven forbid, until early next year." I reiterated my rule about avoiding being bearish for longer than 12 months. Because I turned bearish at the outset of 2001, that year-end deadline is approaching. So start buying soon, right? Longtime reader Graham Munro of Toronto e-mailed asking about how to allocate his investments now that it's time to invest again: value versus growth, country weights, etc. I advised Munro to slow down. It may be time to break my 12-month rule. Let me begin by quoting from my Apr. 24, 1995 column: "Never stay bearish longer than 18 months; 12 months in any but the most extreme situations. Bear markets last about a year. If you are bearish and prices don't fall in a year, you are obviously seeing ghosts. If you do hit it right, and prices fall, force yourself back in after a year. You may not hit the bottom but will have missed plenty of the drop and won't miss the next bull rise." Well, until very recently, I've been right. And this is an extreme bear market, by any measure, lasting, as it has, 21 months. The bull market ending March 2000 was the second longest of the 20th century, exceeded only by the 1942-61 bull. Thus it isn't shocking to see a longer-than-average bear market following. Among the other weird factors present now that make things different: a President not elected by popular vote, the catastrophic terrorist attacks, the disruptive euro conversion and the long time it took for negative sentiment to spread wide among investors. Despite the anomalies, you have to trust that historical patterns will prevail. This bear market is already 21 months old. Very old. Old bear markets burn themselves out. Price declines and time eat away positive sentiment. Only when positive sentiment is gone can the market reach a bottom. Western markets do not like to be down three years in a row. And after huge down moves the markets reach the point where even the worst pessimists can't justify lower prices. As a result, next year will most likely have a positive return. But it may well have a few negative months first. That's why I'm expecting the bear market to continue for a while. I envision this bear market may be running out as late as June. Maybe and probably sooner. Of course, you can't calibrate the bottom's arrival precisely. I don't mind some risk of slightly missing the bottom. Meanwhile, I'm content to remain bearish. Too many investors still remain optimistic for me to expect a near-term bottom. Nevertheless, good investors must always ask themselves: What if I'm wrong? The trick is to avoid being stubborn. There are three signals that will show me I'm missing the market's recovery. Late in a bear market is one juncture where I evoke technical analysis, albeit in a very limited format. I've got a phrase describing this approach: Three strikes and I'm in. If the S&P 500 climbs past three barriers, which the technical analysts call resistance levels, then it isn't just a sucker's rally. My bearishness would then be wrong. And I'll be back in. The S&P, as I write, has been struggling to rise above 1100--which has been acting like a ceiling. That was last spring's low, before the sucker's rally. Getting past 1100 is the first step. The second? Chart the fizzling of the rally in May through the market low point after it reopened in September, postattack: It fell from 1320 to 944. Recovering half that drop would be very odd for a short-lived rally at this late stage, implying a new bull is under way. So if the market rises much above 1130, that will be the second strike. This needs to last several weeks. The third? Note that the market spent vast time this summer bouncing around 1200. Moving above 1200 for several more weeks is the third step. If I get back in before the market tops 1200 I won't mind missing the bottom by a little. Right now, though, it's unclear if the market has the strength to surpass these mileposts soon. I'll publish my 2002 forecast in late January. Until then it's best to remain maximally bearish and defensive. Kenneth L. Fisher is a Woodside, Calif.-based money manager. Find past columns at www.forbes.com/fisher. forbes.com

To: High-Tech East who wrote (46513)	12/3/2001 7:30:47 AM
From: JDN	Read Replies (1) \| Respond to of 64865

Dear Ken: IMHO no one knows how long this slump will last and no one can honestly say what will end it. However, the facts are: 1. Interest rates now at historically low levels and expected to remain there or go even lower in the near future. 2. Inventory levels are now SO LOW that even restocking creates gains in production. 3. Commodity prices and related showing no signs of inflations and in fact many have gone down. 4. Labor supply is now available not tight as a wound rubber band like before. 5. Energy prices have fallen to low levels and not expected to increase much in the near future. 6. Savings levels have actually increased recently. 7. Government is going to eventually (when the Dems stop playing Politics and start worrying about AMERICA) implement an economic recovery plan which will include lowering taxes, increasing spending and the money supply. Considering ALL of the above, I think its REASONABLE to presume that sooner or later things are going to improve. Seems to me time to buy is when things are bad, time to sell is when things are good. For that reason, I would think a prudent investor would begin dollar cost averaging into this market. Thats just my thoughts. Course, I am a LTBH investor. JDN