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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Tom Trader who wrote (7471)	10/26/1997 1:29:00 PM
From: Haim R. Branisteanu	Respond to of 94695

Hi Tom BTW what was you question?? this one? I asked the question of Haim and did not receive a response -- now I shall ask the same question of anyone else who has a bearish bent: Why would one not invest in companies that do not export to SE Asia and therefore have little or no exposure to the crisis there? Now if the response is that the problems there are the start of a global economic crisis, I don't buy it--unless someone can present convincing reasons that it should be so. First there is a big difference between a 20% to 25% correction in the markets which will bring the SPX to last year levels. Secondly I do not remember that I predicted any gloom and doom. Yes for those guys who bought INTC at 99 and it corrects to $65 to $70 and being on margin it is very bad. Just check out Sears Jeo Doe bought it at $63 amd now he has a margin call, or RKB or IRF or SGI and so on. Now by trying to be very simplistic, those employees which will be fired from SGI, or AMAT ot KLAC and so on were no mimnimum wage guy's they had their vacations with AVIS, South West airlines, Hilton hotels lets say in the US. Spent on expensive food and nice gadgets, spoke nonstop on cellular phones and went to sevral Weekend Brodway Theather trip to NYC. Those families will : 1. Draw on their saving - of which 65% are in the stock market 2. Stop going to vacations - e.g. Avis, Hilton and the local bars 3. Stop hopping for a theater weekend in NYC, domestic airlines, hotels, etc. So we have a collateral fall out. Now if the SE Asia countries will flood us with commodoties, like paper and paper products for example, then the paper industry will start to lay off people and so on. This spiral will not go down for ever, put it will put presure on the fringes, which will lower corporate earning which will lowere eranings growth wich will lower stock prices Sorry of being so simplistic Happy trading Haim Haim

To: Tom Trader who wrote (7471)	10/26/1997 1:54:00 PM
From: Jerry Olson	Respond to of 94695

Hey TT Here we are again????? Deja VU, guy, right??? We were here last time this crazy debate lit up!!! I really don't see any difference now & then??? TT, people are talking about, DEFLATION!!!!..... The BEARS are out in force my friend, everywhere, in every newspaper, magazine, all over the place... A REAL Contrarian view, IMO, pal!!! I'm bullish TT, I have NOT changed my Opinion of the markets direction yet!!!This week will be the telling blow to the bears.. "IF", the empl wage # is ok, the Beige Book shows a slowing not acceleration, AG's speech to H&H, is OK, all the rest of the news in market noise... Can you imagine if DEFLATION, or marked slowing of the economy actually begins to appear???? WOW!!! that would be fun HUH??? Anyway, i'm calm, cool, frisky and getting aggressive this coming week!!! My Regards to you, Jerry

To: Tom Trader who wrote (7471)	10/26/1997 1:59:00 PM
From: Joseph G.	Respond to of 94695

Tom, You can't have it both ways: on one hand globalization of economy was that drove the US equty markets up, all Cos. participate in benefits of increasing economic activity, but on the other hand, forget globalization when business is not so good, many Cos. are insulated from world economy and will continue undiminished growth. Chose one. Joe

To: Tom Trader who wrote (7471)	10/26/1997 2:05:00 PM
From: HH	Respond to of 94695

Hey Tom, I'll take a whack at your question: It is not necessarily that those companies which do not or do business in Asian countries will or will not suffer direct consequences, when a bubble burst as did in HK last week; it is a reminder that the same phenom could happen to other bubbles. There is no question that world economies are inter-related and inter-dependant, the extent of which no one is sure. High valuations love and thrive on certainty. Throw in uncertainty and you pull some pins. HH

To: Tom Trader who wrote (7471)	10/26/1997 2:25:00 PM
From: Joan Osland Graffius	Respond to of 94695

Hi TT, >>now I shall ask the same question of anyone else who has a bearish bent: Why would one not invest in companies that do not export to SE Asia and therefore have little or no exposure to the crisis there? Now if the response is that the problems there are the start of a global economic crisis, I don't buy it--unless someone can present convincing reasons that it should be so. It seems to me like some folks are bent on looking at the extremes in this market, which are possible but not probable. If you can find companies that have absolutly no tie with Asia or any place else in the world you are a much smarter person than me. What company does not sell to someone that is not ultimately tied to global markets. If I look at the chain of money flows we all are tied to this thing. I personally think a global economic crisis has a very small probability, but our markets are another animal. George Soros was successful because he considered the human reaction factor when considering investments. I am not smart enough to know what investors will do, but I believe there is uncertainty out there and this is not generally good for Wall Street. Now what could happen next week: We could see a dead cat bounce, i.e. shorts taking their recent gains; People buying like crazy because Asia doesn't count (I don't think so) or the market is cheap (maybe). I think we saw fear on Thursday when all global markets went down and the question is: are all those folks that have a fear tendency out of the market and only those with greed left? I don't know the answer to that question. Just some of my thoughts, Joan

To: Tom Trader who wrote (7471)	10/26/1997 2:29:00 PM
From: Mosko	Read Replies (2) \| Respond to of 94695

Tom, I want to respond to the question you posed <Why would one not invest in companies that do not export to SE Asia and therefore have little or no exposure to the crisis there? Now if the response is that the problems there are the start of a global economic crisis, I don't buy it--unless someone can present convincing reasons that it should be so.> I am niether a bear nor a bull, but do think one can play out possible scenarios based on current events. In the short term, I think you are correct in thinking that it is mainly the multinationals that will be affected by the Asean crisis. Aside from initial panic the deflation in Asia will bring cheaper import prices and all those tunnel vision investors focusing on inflation here will be able breath easier realizing there will be a temporary easing of interest rates. BUT.....as time goes on we will begin to seriously import deflation. The first will be those companies that that export to Asia to feel price pressure and oversupply, but it won't take long for those US companies that have to compete with cheap imports to feel price pressure and realize that they can produce their products using cheap asian labor. Jobless claims go up in the US reducing that ever expanding consumption demand that is neccesary to keep those earnings up. The PE of the markets in general is based on projected future earnings NOT trailing earnings. Sooner or later everybody realizes that the markets have far outpaced growth. Throw in the inevitable trade skirmishes and rising protectionist sentiment and I think you have a pretty good recipe for a bear market. In my opinion the only difference between a crash and a bear market is the time it takes you to get there. Personally I don't have the skill or inclination to second guess or time the market, but I for one am holding 60% cash, 20% equities, 20% S&P short fund. I think we could have some temporary upward movement before more down so will sit on my hands for awhile and see what happens. The question you need to ask yourself is how are you going to know when the sell-off is over? How will you know if we aren't just taking a breather? This is the question I ponder.