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

To: yard_man who wrote (14105)	2/14/1998 11:07:00 PM
From: James F. Hopkins	Read Replies (2) \| Respond to of 94695

Hi Barry; CEs can be as tricky as stocks, each one has it's own personality. I'm far from an expert on them. Was more lucky than smart with both PPT and FAX..got out of FAX before she droped. ( she is over priced at this time ( history wise ) in respect to the main force that supports her. IE Seems they each have a main support , the support has a mean averge to the history of the FUNDs price, If the fund is above that average it's over priced, a sort of TA is involved..were one might look at a open end and compare it to the S&P or such. With CEs you compare them more to the issues that ( underline or support them.) I know what I mean but I'm having a hard time finding the words to explain it. While I'm seeing most CEs more over valued to their historic norms at this time, it does not mean they wont move up more. The demand side is making them to move up and will likely continue for a while. ------------------ Much the same for stocks, ( over valued to historic norm of P/E , book , etc ) however demand on them is still strong. To many dollars chasing fewer and fewer issues, consolidation causes a lot of this. After the consolidation peaks and backs off I think we will get a sizable correction. But I don't see it as of yet , mergers and take overs are in right now, while IPOs are weak. If mergers and take overs give way to a flood of hot IPOs, then on the demand side you can picture how the new money coming into the market gets spread out in a way that the BIG caps stall, and then start to sink as people shift money. The newer issues not being in the major indexes don't help the index..which if it falls enough causes a sort of panic selling..that in its turn takes down many of the recent IPOs, and the cycle starts over. ------------- I like the idea of CEs a lot..and have much home work to do there. But for the time being I need to focus on open end, no load funds and the timing of same. In a way your cash position ( if in MM funds ) also supports the market in general, as most MM funds are fully invested in stocks and bonds and trsy notes. Jim