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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (10325)	12/5/1997 7:00:00 PM
From: Monty Lenard	Read Replies (1) \| Respond to of 18056

Zeev, I think I'm DONE! TCLAUDE

To: Zeev Hed who wrote (10325)	12/5/1997 7:13:00 PM
From: Defrocked	Read Replies (2) \| Respond to of 18056

FWIW.Reasons for some modicum of caution. Cautious investors, full time bears and even some long time bulls have got to wonder about the resilency of this market. The following reasons, in no particular order, are why I cannot participate further in this rally through any addition of capital until my uncertainty is resolved over the next six months. (1) According to the IMF, Asian financial crisis has reduced 1998 world growth projections to 3.5% from 4.3%. Recent anonymous Fed statements project '98 US GDP at 2% to 2.5%, down from 3.7%. I believe this level of growth is incompatible with current earnings forecasts which will be revised downward across many firms. (2) A London news service reported that, according to Okiharu Yasuoka of the Liberal Democratic party, Japanese insurers asked on Dec.4 the government to consider using public funds to protect policyholders from another insurance company crash. Insurance executives warned a government committee that tough market conditions could force other local insurers to follow Nissan Mutual Life, which collapsed last April. Nissan Mutual's failure had triggered a rush of policy cancellations at other insurers, the executives warned. Mr Yasuoka said that his party would "continue to study the use of public funds. But our stance is still neutral." (3) Korea's main labor unions said their members will go on strike to protest economic policies that are expected to more than double the 2.2 percent unemployment rate.(source: Bloomberg) IMF is holding back some of the bailout funds until new government is place Dec.16. (4) Despite the KOSPI Index rise of 7.7% Friday the Korean won dropped 4.9% against the dollar. Moreover, of the 20 most active stocks, 9 dropped by their daily limit on concern slower growth will quicken bankruptcies and thus the net rise, while impressive, was artificial to some degree. I want to see more follow through in both the stock and currency. (5) Slower growth will occur in So.Korea, Japan, Australia. Most European nations are already implementing restrictive monetary policies. Canada recently raised its discount rate by 50 bps. Today's employment number implies a 7% annual wage inflation and may provide ammunition for inflation hawks on the Board to nudge US rates higher, 25 bps up, at next FOMC meeting. If the Fed does nothing, relying on "the Far East to tighten for them", the rebound in US equities has negated that factor IMO. Thus, AG and the Board are still faced with the "irrational exuberance" time bomb. (6) The US economy does not permanently stand alone or above all others. Money flows quickly anywhere on the planet as the last six months have aptly demonstrated. Keep in mind that the Japanese adopted a similar superior and insular attitude for two years after the 1987 crash. I believe we have yet to see all the fallout over the significant drops in asset valuations since August, the dislocations caused by currency devaluations and the resulting competitive and political responses that will be engendered. (7) Given the uncertainty of financing Far East deflation and bankruptcy situations, I want to carefully watch the next two (Feb and May) auctions of US Treasuries for any change in demand by foreign purchasers in particular. I am willing to forego a potential 10% increase in the US stock market to receive more information on the economic outlook and earn a certain 2.5% on 6 Mo. T-bills between now and June '98. The price of my uncertainty is a net "opportunity loss" of 7.5%. Of course, stocks could rally even further than 10% by May. Good...then I will sell my remaining Leaps and core holdings into that rally absent any significant new fundamental information. OTHO stocks could decline by 10 to 20 percent during that period. (8) The continued rise in the dollar relative to the yen partly reflects the lingering concern over Japanese banking conditions and slow growth prospects. This rise may be limited by MOF or US Fed jawboning in the near future. (9) Japanese banks are saddled with an estimated $227 billion in bad loans (source Bloomberg). Yes that is a US dollar number not yen. This number does include insurance company withdrawal concerns. While progress appears to occurring in Japan in regard to balance sheet transparency I require more confirmation. BWDIK.

To: Zeev Hed who wrote (10325)	12/5/1997 8:01:00 PM
From: Don S.Boller	Read Replies (2) \| Respond to of 18056

Zeev: Correct. A market that won't sell off on bad news - asian bank troubles, etc - is exhibiting real power and those that get in the way (shorting fliers) can get run over. This, whether or not they may EVENTUALLY be proven correct. Nothing can be more costly than an idea whose time has not yet come. I say this with all hunility (having been in the market for 40+ years) There are times when I think it is prudent to hoard cash and only nibble at your perceived course of action. This helps the stress level and aloows for clearer thinking IMHO!!!! Don.

To: Zeev Hed who wrote (10325)	12/5/1997 8:31:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 18056

zeev: if I was a fund manager I would have desperately wanted to buy anything that wouldn't get me fired this week to spend the excess cash that came in Dec 1, and go on vacation until Jan 1. " let's see, I won't get fired for buying msft, psft, csco, hp, ibm, etc etc"...

To: Zeev Hed who wrote (10325)	12/6/1997 1:19:00 AM
From: Simon	Read Replies (1) \| Respond to of 18056

The market was handed an excuse to go down today (strong emplyment and 24 year low in unemployment) but did not use it.>>> 2 yrs ago the employment figures came out in March (I think) and the market blew out 180 pts. in the afternoon. The number was only mildly higher than that which was expected. If the market want's to go up, nothing makes much difference. If it is in a down mode, a mouse on the exchange floor will probably panic Maria. She will scream and 10 million investors will panic sell. (GGG)

To: Zeev Hed who wrote (10325)	12/12/1997 9:38:00 PM
From: GTC Trader	Read Replies (1) \| Respond to of 18056

Zeev, << I think that the market wants to get really exuberant before the mid January decline, what better way than making a new high on the Dow without confirmation from the troops? >> (12/5) On 12/5, you said, "The market was handed an excuse to go down today (strong employment and 24 years low in unemployment) but did not use it. Go figure." Today, I say, "The market was handed an excuse to go up today () but did not use it. Go figure." Treasury bonds were buoyed by an unexpected 0.2 percent drop in November's Producer Price Index. Economists had expected a 0.1 percent rise. The data was seen as further reducing the likelihood that the Federal Reserve will raise interest rates at a policy-making meeting on Tuesday. The long bond was up a full point in late trading, its yield dropping to 5.93 percent from Thursday's close at 6.00 percent. I see that you are still holding to your 3 to 5 weeks of rebound before the massacre in January. (This despite the fact that Mark Schulz finally went BEARISH and announced today that he would be short for the rest of the year. "The Chartist" also leaned towards bearishness for the first time today stating that the Nasdaq closed only 1 point higher than its 10/27 close ("very troubling") and if it closes lower next week, this would give their first SELL signal since May. Suddenly, the market and advisors are saying what you and Mohan have been warning about for the last couple months. Is it possible that the year-end rally will be skipped this year? What signs would we get? Or are we too oversold by the big drop on Nasdaq this week? I sold my Compaq put for a small profit on Wednesday, missing a much bigger profit opportunity yesterday. I am looking to sell my December BAANF put Monday or Tuesday. It has dropped nicely the past four days, continuing to go down today even after the Dow rebounded. Is selling it Tuesday safe, or could the market rally early? As always, your thoughts and inputs are GREATLY appreciated !!! : ' ) You are often wrong, you change your opinion frequently (like any good indicator in response to changing conditions), BUT YOU ARE UNCANNILY ACCURATE A GREAT DEAL OF THE TIME. I am constantly amazed. Your call on gold prices, for example. Everyone was screaming that the Gold Bull Market had started, and you pegged the current decline perfectly! Thanks again for everything. Best regards, Happy