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

To: Tommaso who wrote (11032)	12/6/1997 9:18:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 94695

Tommaso (sei Italiano?)>>The venerable Madison Fund was acquired by some guys who thought they could ride the energy boom and go all into oil and gas. After many evolutions that $25 is worth about $8. But all the rest (some changing names, being acquired, open-ended) have appreciated about sixfold on average. Some eightfold.<< On the fund that tanked, I wanted to make and intersting remark (i think I herad it first from Peter Lynch) and it is that no matter how good anyone may be at picking stocks, for each ten picks there will be at least dog or two dogs, the good picks more than make up for the bag ones. The six-eigth fold performance you mantioned is quite good and it is roughly 15%/year compounded as at this rate money doubles in five years! This shows us that the returns of the last three years (I am taking the liberty of including 97 which ain't over yet) are just outrageously high. The other teo rules of tumb good to keep in ones head are: at 10% money doubles in 7 years, at 7% it doubles in 10 years. >>I have mentioned this so often that I expect to be accused of being a shill for the fund, but BEARX (Prudent Bear) with a diversified portfolio of short positions in high P/E tech stocks and others is now my major holding.<< I agree. no one can tell but this fund may do quite well in 1998. With my own portfolio I run what my considered to be a version of the prudent bear fund. >>It's still not 1929, but I think that anyone who has been in cash since 1995 may eventually be happy about having got into that position.<< Quite possible. However, if you are talking cash since Jan 95. The market would have to tank real badly in order to have the index fall to a level that would result in average annual return of approximately 5%/year since then. Pancho Pancho