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Pastimes : Prudent Bear Fund (BEARX): contrarian investing -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (730)	10/9/2002 4:34:17 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 793

I hope it's not too rude to point out that "overbought" is an impossibility. The term might conceivably apply for a closed end fund, but BEARX's value merely reflects the value of its components and not any buying or selling pressure. You're not being rude Tommaso.. But it's NOT impossible since the value of BEARX's assets, like most other funds, closely approximate the value of the stocks they hold (and some cash). It certainly isn't as accurate as I'd like, but I think it gives a close approximation.. And since TA measures the value of any particular stock and it's "overbought/oversold" status via stochastics and Williams%.. Personally, I think its valid since BEARX indicators are showing overbought while the general market indices are all indicating oversold... Contrarian indicators for contrarian valuations. As for stocks being terribly overpriced, in many cases that would be correct. One has to be very selective... And I'm sure you don't count Gold stocks as overpriced, now do you?? :0) But don't discount the power of a coming market rally in December January.. Especially when the inspectors arrive and begin work in Iraq, indicating to the market that war may be completely avoided, or at least delayed for 6 months or more. And I agree that trading BEARX is not ideal... But limiting one's investment in the fund to a time when the general markets are overbought and not oversold (like now) would likely provide a better return over the long term.. Thus, all I was stating is that folks might want to hold off investing in it until the price finds a support level that matches a price peak in the overall markets that BEARX is shorting. Again.. not totally accurate, but I was using weekly and monthly chart indicators and not more volatile daily ones. Cheers, Hawk