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To: jim_p who wrote (15641)	7/28/2002 12:07:25 PM
From: Gottfried	Respond to of 23153

jim. >Anyone see a sector that looks attractive??< In the past you invested in stocks that seemed unattractive to almost all others and often won. Regards Gottfried

To: jim_p who wrote (15641)	7/28/2002 1:42:48 PM
From: quehubo	Read Replies (1) \| Respond to of 23153

I would be careful with utilities. The combination of regrettable aggressive acquisitions, especially international ones, and lower prices for generation will weaken the strongest and flatten the others. My sense is the volume for generation will be good, but there is more than sufficient generation in most markets now so margins will be depressed. Until NG prices rise enough to effect marginal electric prices considerably these guys will have a hard time. And then only those with the NG supply covered will benefit. Next Summer will have even more new NG fired generation online than today with conceivably a very tight NG supply market. XCEL (NRG) has a poor reputation in the industry IMO and I suspect a long litany of bad news to be revealed.

To: jim_p who wrote (15641)	7/28/2002 1:43:00 PM
From: que seria	Read Replies (2) \| Respond to of 23153

jim p: Long post leading up to answering your sector question. You've well outlined the negative factors weighing on stocks. If you believe (as I do) that we are heading for a financial confidence crisis for reasons very well presented by Stephen Roach and others, I'd hedge with what does well in crisis. Usually that would be cash, but now the dollar's value is itself at issue. I try to keep in mind what the "I" in FDIC and SPIC stands for: "insurance." That promise is only as good as what backs it up. That "C" is for corporation. Even if the feds act as though the full faith and credit of the US gov't is on the line, to keep the financial system intact, the dollar couldn't take major cracks in our banking system without melting. It has already undergone a recent minor melt from the heat of much less intense risks than major bank failures. There will be staggering claims on gov't funds if JPM, say, goes insolvent. The data on JPM's derivatives, coupled with its sanguinity about their risk, has an eerie deja vu feel to it, especially for us in Houston. Hard to believe just bad loans would put JPM at risk, but derivative losses on top of such loans would. (I read that hedging/derivative books overall aren't underwater below $340 gold, but I don't know about JPM's and wouldn't have confidence in what management said anyway). This leads to: I want to own some of the antidote to a dollar breakdown and/or full-scale financial crisis. So as to a sector to enter now: I would start positions in the best gold stocks as insurance, and just hold them. I say start because I can see how gold stocks could easily go down 25-30% from here just next week, especially if the feds are propping JPM. If the PPT buys to support the market (I suspect but don't know that they have), they will surely loan gold to bail out JPM or others for whom they're on the hook (legally or as perceived). Buying small entry positions now and bigger ones later would be my style if I weren't already in at mostly lower prices. I believe such loans are a likely explanation for gold's sudden and sharp decline lately. Greenspan is on record that central banks "stand ready to loan gold in increasing quantities" as needed. I'm sure the feds believe that averting LTCM x10 or x50 qualifies as a need. I see the feds, and thus the dollar, caught in a vise as parts of the system are unstable in this environment yet "too big to fail," leading to throwing "good money after bad." I'm also going to short builders again if I get a good opening next week. I see the prototypical US consumer having lived beyond his means for so long that he's nearing tap-out. The home "equity" outflow that has been important to consumers' spending should subside for lack of equity and/or lower rates. The reversal of consumption trends will be more than a day of reckoning for the economy, from which volatility-seeking investors can make money. It will be very sad for our people, because much of the consumption is food, shelter and medicine for Americans just trying to get by month to month. I expect soon to see much more saving, deflation, and printing, injections, and rate cuts by the Fed in an effort to avert deflation. I expect the Fed to succeed with inflation, and gold to shine. But I expect even trying and failing to avoid deflation could leave the dollar lower against other currencies, because other nations inflate less and are more competitive. So I think gold stocks do well either way, but it is crucial to "buy right." I'll post some LT charts since for me this is a LT play.

To: jim_p who wrote (15641)	7/28/2002 2:41:17 PM
From: upanddown	Read Replies (1) \| Respond to of 23153

Jim, the utes may not be the place for ST gains but what about waiting out the storm in them and collecting the dividends rather than accepting the pathetic returns for straight cash? The DJUI is close to five-year lows, many utilities are still primarily regulated businesses with very attractive yields and their energy costs could be declining soon. I see utilities as a sector likely to benefit from investor dissatisfaction with available yields from cash and treasuries. They also look attractive to people like me who are tired of the game of chasing short-term gains and looking for a little financial peacefulness. I suspect I may not be the only person around here thinking that way. John

To: jim_p who wrote (15641)	7/28/2002 5:22:33 PM
From: Sweet Ol	Read Replies (1) \| Respond to of 23153

One sector to consider is International Bonds. European interest rates are higher than ours and their bonds yield more. As the dollar drops the effective price of the bonds goes up. I put some $ in Rowe Price Int'l Bond fund and it did very well until the dollar firmed up in the last few days. stockcharts.com I see it as another sector that will be good if Que Seria's scenario plays out. Best to all, JRH