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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (65235)	8/6/2002 2:02:42 AM
From: Sam Citron	Respond to of 70976

I can't see rewarding error with more cash. Good for you, Cary. Looks like you have learned the #1 lesson of Bear Markets: Husband Cash. Your only errors were in assuming the market is as rational as you are and not having any ammo left for the "mother of all buying opportunities" at 2x book. NVLS is there now. The sense of a buyers strike is almost palpable these days. There's just no point in catching the falling knife anymore. Value investors only have so much cash to support the stock market at implied FMV. Now the second richest man in the world is just beginning to bid for pipeline and telecom assets at UMV (unfair market value). These are "heads he wins, tails you lose" deals that are not available to the general public and do not directly involve equity, but rather $500 million loans secured by $2 billion natural gas pipelines from Oklahoma to Omaha and Chicago. Who needs stock that's worthless in bankruptcy, when you can negotiate your own secured debt placement with a distressed seller who has sold the public a ton of stock during the bubble to build an empire that is temporarily in tatters? But as Buffett is not bidding for stock, it is doubtful that his billions will do much to buffer a bear market. Too bad for stocks. Those billions will be missed. Should have known when he was buying Moody's that this was not to be the Golden Era for stocks. Conventional wisdom suggests that stock prices eventually get to a point that the Really Big Money will bid for shares. I'm not sure who that is, but when he does it will be almost like a flock of birds taking flight at the same instant. Nobody will want to be left behind. The sellers will momentarily disappear and prices will be up 20% in a matter of days as short covering adds fuel to the fire. But soon that fire will be spent and we will have to test that bottom again. If it holds -- great, the momentum funds will be able to buy again. There is so much anticipation of the bottom, however, that I am inclined to think it may not come for another year, so that an entire generation of investors can be thoroughly disillusioned and totally washed out. Isn't that what is supposed to happen after a bubble? Scary? You bet!! Like the Japanese -- too frightened to invest, to spend, or do anything but put money under a mattress. It's not happening yet. We're Americans and it's our patriotic duty to spend right up until bankruptcy and then get a second chance to spend again. Statistics show we're still buying cars and houses like crazy. But let's see what happens if/when the bombs go flying over Baghdad right before Election Day, or if oil spikes, or if we ever have to pay for these wars with higher taxes, or if interest rates go back up. I can't figure any of this out so, like you, I'm stuck husbanding my remaining cash waiting for the mother of all buying opportunities or until my wife needs it, whichever comes sooner. <g> Sam