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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (17643)	3/30/2002 9:24:48 PM
From: westpacific	Respond to of 74559

US Mortgage debt about peaked - $6T, (largest single debt category on the face of planet earth!), M3 has to be drawn down - 8.4T, interest rates have to go the other way - 1.75% (lowest in 40 years!), massive pressure from central bankers around the globe. The above three are what drove the bubble economy, not baby boomers!! Get it!! All three heading the other way, and we could add dollar bubble and trade deficit - NOT GOOD FOR SPECULATIVE, BUBBLE EQUITIES! And I will be the first to say, there is still the chance of one more subdued blowoff top to this whole game or we could just collapse on the other side. In other words the game is now at its utmost risk for the remainder of 2002. The game is now at it most speculative/casino/roll of the dice phase. Trade light, hedge in gold/cash/utilities/cash and have the patience to W A I T.

To: AC Flyer who wrote (17643)	3/31/2002 1:03:39 PM
From: Stock Farmer	Respond to of 74559

Do I expect original thought? No. But unlike a chirpy little baby bird hatched yesterday, I do like to look at the partially masticated brain food being served up, identify the original meal from which it came and thus assess the vitamin content. Versus swallowing whole, that is. And you are correct. Conventional wisdom is usually correct. Or so conventional wisdom would have us say. Except during unconventional times. And yes, the oldest of the boomers are retiring now. "Freedom 55" has been a mantra for more than a decade. And all things being equal we could expect the first wave of early retirement by about 2010 give or take. All things being equal they would have been planning this for a while. But think for just a nanosecond. What does one of the longest running bull manias do to one's retirement plans? The word "accelerate" should spring to your mind. Many folks my age have accumulated more assets than their parents are living on. Even post tech-wreck. I know from first-hand experience that this is the case. Freedom 40 is already an option for many. Self included. Sadly however, there is another equally large cohort whose misguided direction of capital into ponzi tech schemes based on best-seller pop literature masquerading as sound investment strategy... well, let's just say it has extended their retirement plans. Zero sum. And all that. The net effect merely being an expansion of the standard deviation. And so perhaps without us early birds stealing your worms, I would agree with a boomer retirement assessment of 2010 +/-2. However under sigma expansion, it could very well be more like +/-8. Which leaves us in very uncertain territory, to be sure. Finally, we seem to be agreed that the market is going to go up for a while before it goes down. And where we differ is on two points: (a) certainty in the duration of "a while", and (b) the strategy to take during this interval. It appears to me that you mistake the stance adopted by many on this board. Self included. For our strategy to be effective, the market does not have to go down now. Or next week. Or next year even. It just needs to go down, a while from now. Valuations are too high. And there is too much debt. They can get higher, and indebtedness can increase. Every bit of up merely increases the slope of down. I am (we are) positioned as though this "a while" could be of indeterminate length, and so that I (we) do not have to scramble when it arrives. This frees me (us) up to do very effective scrambling in the aftermath of its arrival!!! In eight, plus or minus eight years. Or to scramble along the way. Which renders computation of the average, the plus and the minus to be merely academic and highly irrelevant. John