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To: OldAIMGuy who wrote (6139)	11/9/2002 6:06:33 AM
From: Asymmetric	Respond to of 6317

Tom, Some thoughts. Tom, First of all, thanks for your post and and the accompanying charts and stuff. While your charts show this is one of the lowest risk entry point for stocks in years, I think the the two things one has to ask is why, and then what is it that is going to turn things around. Low risk correlates to periods when investors avoid risk, (right now in spades)...and periods of high risk occur when investors embrace risk. Why are investors avoiding the risk of investing in stocks as your charts so clearly show? One big answer is Loss of Investor Trust and Confidence. 1) the game is rigged: From dishonest stock analysts, to distribution of IPOs to favored clients 2) widespread greed at the corporate level: CEO's and senior management appropriating the lion's share of corporate wealth to themselves. 3) fraudulent accounting on a widespread scale: Enron, Worldcom, Arthur Andersen, etc. 4) dishonest representation: pro-forma earnings, and the refusal to expense stock options. I could go on but I'm sure everyone gets the picture. In fact, the fact that there's more stuff that I could add to the above list just shows how deep the problems run. Bush and Cheney assert that the problems on the street are just the products of a few bad apples. Leaving aside whether they are right or wrong, all you have to do is look at what the reaction of Wall St has been, the reaction of the banking sector, the reaction of Moody's and S&P, and Fitch's and the bond market, at the reaction of foreign investors and institutions, at the massive loss of $7 trillion in wealth and you will know that that is NOT the perception of those who have big, big money at stake. What will turn this around? Getting rid of Harvey Pitt was a good start. Clean up Wall St. Throw white collar crooks in jail. Tell CEOs to screw themselves when they go grubbing for obscene pay packages. Clean up the accounting firms. Until the above happens, investors overall are actually behaving rationally when they avoid buying stocks. Will the above happen? Probably just enough to make a show of things, and then everything else will get swept under the proverbial rug. Will that give the majority of small investors the confidence to come back into the market? I dunno. You tell me. Continued.....

To: OldAIMGuy who wrote (6139)	11/9/2002 7:30:08 AM
From: Asymmetric	Read Replies (2) \| Respond to of 6317

Is this really a low risk or a high risk environment? Or you take the high road and I'll take the low road, or is it vice versa? My own reading is that this is a high risk investing environment that we are in, not a low risk period. This is a trading environment we are in right now, and that's why I am in the market, as a trader, not as an investor. If I can make a profit, I take it and sell out. If I'm looking at a loss, I try to not let it get out of hand... and get out. Why do I see this as a high risk environment? 1) The dollar is overvalued. George Soros has stated he thinks the dollar is 30% overvalued. As someone who broke the Bank of England, I'm inclined to listen to what he has to say. What's bad news is that he now has lot's of company. Investment firms from Merrill Lynch to Goldman Sachs are forecasting a decline in the dollar. With the Fed rate now at 1.25%, and the ECB and Bank of England around 4%, obviously you can make more by putting your money there than in the US. The dollar as a currency has been weak and falling since Greenspan cut interest rates by 1/2% and the Euro has broken thru prior resistance. What is aggravating the situation, is that the US is running a balance of trade, current accounts deficit to the tune of about $1 Billion per day. How long can this continue? Not much longer. When the tide of foreign money begins to reverse and they refuse to accept ever cheapening, ever worthless dollars in return for their goods and services, the adjustment will be not just sharp at times, but prolonged over many years. O'Neill talks a strong dollar policy, but in reality, the administration does not have one. Where does this leave stocks? Well much of the dollars that foreigners hold is invested in our stock and bond markets, commercial property, etc. If they no longer want to hold so many dollars, then they will sell off these assets in order to be able to exchange the dollar for some other currency. The last thing we need is more selling, more people throwing in the towel, especially when those people throwing in the towel hold $2 trillion in stocks - that's how much is being held by overseas investors. But IMHO, it's coming. There are other factors that make this a high risk environment. High debt levels by consumers and corporations, increasing layoffs and consumer spending that looks about to poop out finally, stock PE's that are still overstated due to options not being accounted for and other shennanigans, book values still overstated due to goodwill and various other impairment to assets, airlines, utilities, telecommunication companies still going bankrupt, Moody's and S&P still downgrading more companies (debt) than upgrading, overcapacity, a wounded banking sector that is looking to cut exposure - ie for reasons not to lend, instead of lending, etc. and it's a pretty bleak outlook. Sorry to be such a wet blanket. Right now, my take is that the dollar is the thing to keep your eye on because it's about to become a huge battleground. And that's the last thing we need. The bet that's being made is that it's in no one's interest, debtor or creditor nations, to upset the applecart too severely and to let things adjust slowly. We'll see. Peter.

To: OldAIMGuy who wrote (6139)	11/9/2002 7:46:36 AM
From: Asymmetric	Read Replies (1) \| Respond to of 6317

By the Way: The Latest on Jim Stack >>I don't subscribe to Mr. Stack's newsletter, so don't know if he's now switched from being exceedingly bearish to bullish<< Here's a blurb about Stack's views: Forbes Newsletter Watch Investment Gurus Converge On The Big Apple John Dobosz, 10.24.02, 8:53 AM ET <snip> For investors who need to be reminded that we are indeed still in a bear market, there's Jim Stack of Investech Research, who made the trip to the Big Apple from his bucolic perch in Whitefish, Mont. Stack has used a lot of ink warning his subscribers that stocks are still not out of the woods. For several years, Stack has been critical of Fed policy that he says created the equity bubble and the disastrous aftermath. Stack's sobering perspectives force investors to consider the unpleasant possibility that U.S. equity markets are doomed to follow the lead of Japanese stocks caught in the funk of a 13-year bear market. Stack does see some evidence that the bear is near its nadir, such as the downturn's duration and damage to the major indexes, as well as the pervasive pessimism on the part of investors and advisers. Nonetheless, persistent economic weakness and declining consumer confidence, says Stack, suggest that the claw of the bear may send stocks lower still.<<

To: OldAIMGuy who wrote (6139)	11/21/2002 3:18:05 AM
From: Asymmetric	Read Replies (1) \| Respond to of 6317

Tom, You Made a Great Call. I'd be remiss if I didn't point out that you (and your indicators) made a great call. Looks like the longs are trying to panic the shorts. From October's data, the short interest was at a historic high, so there's lots of fuel there if the institutions can continue to gun the market. Unfortunately, short covering is only a short-term phenomenon. I am hedged both ways, so as/if the market continues to rise, (which futures and Nikkei indicates it will tomorrow), I will continue to scale out of my longs and may add to my shorts. One stock I shorted yesterday (at 13.90) that should stage a spectacular collapse will be Brooks Automation. Their earnings report tonight was a complete disaster. Good luck to all. Peter.