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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (2148)	6/6/2003 12:59:10 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 4904

hi bc, a couple counterpoints to your interesting post-- * i believe a decline in the USD historically has not been good for US assets. this makes sense because foreigners withdraw money from the market. also, your premise of a declining dollar leading to stock-price rises only makes sense in the long run if corporate profits rise, at least in nominal terms. remember, stocks will rise in nominal value when their nominal profits rise accordingly (the rest, as you know, is expanding/contracting multiples). this requires INFLATION, which supposedly doesn't exist yet, and will kill the bond market and housing market (and economy and stock market) when it actually happens, outside of energy. just remember how the market went nowhere from 1966 to 1981 despite the worst inflation in US history. for the time being, we continue to have a horrible profits recession, with profits around an all-time low as a percentage of GDP. * i try not to look at shorts in isolation, but as part of my total portfolio. right now i am 9.8% short, but i am also about 66% long. i am down about 14% on my shorts, but up about 17% on my longs. result is i am up 12.4% on the year--actually more because i am not counting pocketed profits. if i had not been carrying at least some shorts, i would probably have had a lot less longs, so my overall portfolio gains would have been less than 12.4%. i also tricked myself into more longs by pretending that the gold miners (18.7% of portfolio) are not really longs. this is not to say that i am not frustrated about the losses on my shorts and wish i hadn't made them. but "that was then, this is now"--at this point, in this overbought market where pigs are flying, i can't see NOT being partially short. * while you make an interesting observation about shorts increasing one's USD exposure, the contrarian in me would point out that the USD, pig that it is, is currently very oversold and could have a decent bounce or at least stabilize against the euro. * other than shorts, my main areas of exposure are energy stocks (30.57%) and gold miners as mentioned above. my other equities are basically all value stocks, and most are foreign, so that is more non-dollar exposure. the rest is cash and CD holdings, which i anticipate deploying at least partially into the bullion ETF if/when it happens, and perhaps adding to shorts. oh yeah, i need to keep something to pay that rising energy bill, too -g-.

To: Perspective who wrote (2148)	6/6/2003 1:00:07 PM
From: Box-By-The-Riviera™	Respond to of 4904

Within a dollar market... apples may be apples. as to the rest, most here have been taking steps in regard to the rest of your points for years now. great rant!

To: Perspective who wrote (2148)	6/7/2003 12:02:06 AM
From: LLCF	Read Replies (3) \| Respond to of 4904

Assuming your short is priced in dollars I think the first part of your argument is looking at the problem sideways.... the next part seems to hit it on the head.. that the declining dollar makes shorting companies a bad idea... ie they will rally vs the declining dollar. But assuming you pick a stinker [the S&P? LOL] and are correct, or even 'flat'... you are not long and do not lose double. Cool rant though... agree with your premise at some point, but for now with current economic situation: I'm wondering about the plummeting dollar with unchanged to DOWN earnings [in dollars]?? Seems to me the market could be WORSE than owning the dollar if those earnings don't turn around. Why??? Other than sky high valuations unless earnings really take off, if you're a global or even US investor and that dollar keeps getting printed there are going to be other places that look pretty good for your money unless the equity market keeps going balistic [making it ever more overvalued]... once the selling starts.....? Wonder what's worse... worthless paper or overvalued shit denominated in worthless paper? DAK