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

To: Brad Bolen who wrote (9348)	11/8/1997 3:23:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 94695

Brad-Banks don't get in trouble due to slow down in economies they get in trouble when they lend on 'bubble properties' like a 100sq -m apartment for 1.5 m $ and the borrower uses that money to buy highly inflated property stocks on Japanese and HK stock exchange- this is the story of Nekkei and HK 60 % of HSI cap is property cap. Can you imagine Wall Street 60% cap attributed to real estate sector yielding less then 3%. This rationalisation of prices saves the world from future major catactrophes and it is only because of market forward measuring sensors that we can have such corrections whereever excesses are made- markets who are not expose to bubble will become dearer and investors will soon realise as they start making distinction btw exorbitantly expensive markets and markets based on global proprietry rights of products like Pentiums and Windows.

To: Brad Bolen who wrote (9348)	11/8/1997 6:51:00 PM
From: Dwight E. Karlsen	Read Replies (2) \| Respond to of 94695

Brad, I'm certainly not one to discount the effects in the U.S. of economic recessions in other countries, such as Thailand, Indonesia, maybe Hong Kong, S. Korea..and so on. I just read where someone was quoted saying "analysts just can't get their arms around what the effect will be on the U.S. due to the financial turmoil in SE Asia." That's a big reason I own DJX puts. I think that until the analysts come to some conclusions, we are faced with doubts, rumors, uncertainty, and fear. Stocks are going to have an uphill battle in such a climate. I'm not going to personally try to figure it all out. I'm just along for the ride. I did notice that leading economists have trimmed an average of 1/2 pt off the GDP growth estimates for 1998. So people are working on it. Regarding other effects such as your "I.E." senario: It's very difficult, IMO, to forecast the economy. For example, right now we have a very tight labor market, particularly in the high-tech, highly skilled areas. So if we have "Companies, starting with techs, begin layoffs", then that solves that problem. High wage pressure is eased as supply-demand comes into balance. A.G. may have to start thinking about lowering interest rates. Now I know that deflation is one of the fears out there. But I find it personally difficult to worry about inflation and deflation at the same time. Right now, many people are convinced we are trending helplessly towards either one or t'other. So I'm not worrying about either. I just watch the charts and think fundamental, continuing with the FA/TA combination I use for investing. I'll let others strive towards a consensus on where the economy is headed. When they figure it out, I'm sure the trend will show up in the charts. DK