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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (3451)	9/8/2007 10:13:48 PM
From: Investor2	Read Replies (1) \| Respond to of 10065

Have you noticed that the number of posts per day on the other two Bob Brinker forums on SI dropped from a huge number to zero? That's also true for popular Bob Brinker discussion threads on other web sites. It couldn't just be that everyone went on vacation at the same time, could it? Best wishes, I2

To: Boca_PETE who wrote (3451)	9/10/2007 7:23:57 PM
From: Beobe	Respond to of 10065

With the FED doing what's necessary to keep liquidity flowing, I personally doubt if such recession fears are justified. September 6, 2007 AHEAD OF THE TAPE By JUSTIN LAHART DOW JONES REPRINTS After a Rate Cut May Not Be Best Time to Buy September 6, 2007; Page C1 At an unscheduled meeting on Jan. 3, 2001, Federal Reserve policy makers cut their target rate by half a percentage point to 5.5%. Investors jumped for joy and dove back into tech shares. The Nasdaq Composite had its best day ever, rising 14.2%. With the Fed widely expected to reduce rates when it meets in two weeks, the 2001 experience is a cautionary tale for anyone who might take a rate cut as a sign to buy stocks. The Nasdaq fell 57% after that first cut in 2001. It didn't bottom until October 2002. In fact, investors would have done better had they held off on buying stocks -- tech or otherwise -- until the Fed started raising rates in 2004. Perhaps some of the rules of investing are changing. Investors tend to believe that interest-rate cuts are good for stocks. Research seems to bear that out. Robert Johnson, a researcher at the CFA institute, and three academic co-authors, will soon publish an article in the Journal of Investing arguing that it paid off in the past 33 years to buy stocks when the Fed cuts interest rates. They tracked the performance of stocks against changes in the discount rate, which is the rate the Fed charges for overnight loans to banks. (The authors say this is a better guide than the widely followed federal-funds rate, which the Fed also controls.) From 1973 through 2006, they found, shares, especially cyclical ones like retail stocks, tended to perform better after easing cycles began. But interest-rate cycles don't always appear to be a great guide to stock performance. In the 1960s, for example, stocks did well even as interest rates were rising. It would be unwise to ignore the past 33 years of history, but it might also be unwise to put too much weight on them.