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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (25477)	11/17/2002 10:42:05 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

Edging towards optimism - I find the Barton Biggs statement interesting - "Biggs also argues that pessimistic scenarios appeal to the intellect more than optimistic ones. The reason, he says is that failure represents a closure, and that the events leading to it can be thoroughly analyzed, whereas success is never definitive. Thus, analytical investors and strategists tend to demonstrate a bias in favor of pessimistic scenarios and arguments." I have know a number of survivalists who were buying gold, guns and farmland back in the early 1970s. Although the world came closer to some nasty events, like nuclear war, more than once since then, unless one lives in Argentina, Indonesia, or Kuwait their Doom sceanarios have not come true. (If you do live in a place like that, you should consider moving some where else) The Boom and Busts happen, and assset prices move to extremes, we get inflation /disinflation/ maybe deflaition - but things are net better for most people - certainly in the developed world , and in huge pieces of the developing world, Africa being possibly an exception. South Korea, China, Taiwan , Phillipines, Spain, Ireland, Mexico just of few of the places which improved enormously. So I think the bias should be long term postitive. The other factor in most Doom sceanarios is the assumption that most other people and insitutions are too stupid to get out of the way of an on comming train. For example, the gold bugs worry that JP Morgan is way short gold from doing the gold carry trade. They have been saying this for well over 2 years now. Would not be surprised if JPM has hedged in some fashion, or wound down the trade, or is even long gold. I'm pretty sure that many of the hedge funds who did gold carry trades hav now gone long gold - they hedge funds were all over the last Grant's Conference I went to. John Drizard, who writes for the FT on Fridays, expected that the time of maximum distress in the financial markets would be around January 2003. That guess was made about 2 months ago, and it appears things are improving already. Corpoarte bond spreads in the US are heading down - even Ford Motor's paper is getting a higher price. I want to start edging to more long postions, but I would like to see a little more bad news and fear first -like Operation Regime Change.