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To: Price Monger who wrote (38214)	10/29/1997 1:33:00 AM
From: Fred Fahmy	Respond to of 186894

Price Monger, <but now I'm also in search of a good hedge philosophy.> Let me know what you find. I know some people buy protective puts as insurance to lock in profits or sell covered calls. I guess these are hedging tools. For my part, I think a good hedge is to always keep a cash reserve around so that you can take advantage of these panics. People who bought yesterday morning made a killing in most of the techs. BTW, although I had cash on hand I didn't get anything yesterday. I really thought we would have one more day of panic and I didn't think things would recover so quickly. Oh well, I'm sure I'll get additional chances in the future <GG>. Here is my take on the market and Monday's action. First of all I do think that in general the market currently has many excesses. Many of the blue chips like Coke, P&G, JnJ, etc are overvalued IMO. Their multiples are simply too high given their long term growth potential. I see two problems with Monday's sharp correction however. First, in such a panic all stocks get hit hard whether or not they are undervalued or overvalued. During panics like these, the market makes little, if any, distinctions. Second, there is no macro economic justification for a prolonged market crash/bear market. Earnings continue to be strong, low inflation, low interest rates, etc. These are not the same conditions that prevailed in 1987. Good luck in developing a hedging strategy and please share what you find out or determine. FF