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

To: Gottfried who wrote (15034)	7/13/2002 3:58:55 PM
From: jim_p	Read Replies (2) \| Respond to of 23153

VIX at 40 says to buy and hold. I've got some cash and all my margin for a panic, but plan to stay fully invested as long as the VIX is at these levels. Lots of gloom and doom. Also lots of good companies with dividend yields over 4-5% which are low risk. Which way to go??? Wait for the panic and chance missing the 30-50% run over the next month or two??? Buy companies like DOW and EP and enjoy the yield with 10-20% upside in capital??? Buy all the high beta tech stocks you can stomach and turn off the computer for a few weeks??? Decisions decisions!! Jim

To: Gottfried who wrote (15034)	7/14/2002 11:28:01 AM
From: The Ox	Read Replies (2) \| Respond to of 23153

Hi G, One should expect tech to lead the economy after the bear is done. Innovation and productivity gains are, for the most part, tech based and one should expect this to continue, even during bear markets. Many companies are in industries where they must spend money on R+D or they will be left in the dust. There's no way out other than to spend for the future and a significant portion of this spending will be on information and leading edge technologies. The key question is when will the bear be finished? There are a number of factors which will come into play . A number of these factors don't seem to be discussed that much, or I should say that I haven't seen them kicked around. One major issue could be under funded pension funds. Many, if not most companies have seen their net pension funds drop with the markets. Combine this with lower headcounts and reduced top line revenue figures and there could be a few companies out there which will have to find new ways to bring their pension funds back in line. One bright spot, in the long run, will be that too much pension money was being invested in areas that have too high of a risk factor. More pension funds, going forward, will get back to where they belong, in widows and orphan's fund types of vehicles. I think this could continue to be a drag on the major US indexes as the reshuffling and restructuring moves forward but when all is said and done, the net effect will be a more positive footing for the future. I think 2002 will continue to be a very difficult environment (over all) for US equities. However, I am a believer in the presidential cycle, where the first 2 years of a new president's watch are very difficult for the stock market and the next 2 years are usually pretty bullish. This year's turmoil will end up being next year's low starting point. The hard part is not riding the wave down this year by getting too bullish, too quickly.