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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (3208)	2/18/1998 9:56:00 PM
From: Cosmo Daisey	Read Replies (1) \| Respond to of 18691

Mike, """"Far more important than the rate of interest and the supply of credit is the mood. Speculation on a large scale requires a pervasive sense of confidence and optimism and conviction that ordinary people were meant to be rich." --John Kenneth Galbraith, The Great Crash, 1929.""" Things have changes since 29. In 29 a few people "controlled" the market. Today's influence is widespread and the chaos theory is present in the market. Chaos theory simplified is a butterfly flaps its wings in China and its a windstorm in New York a few days later. Everyone has the same information but each reacts to it differently. In 29 it was an orderly market because of the control of a few people acting in concert. Yesterday my wife looked at my bank statement and pointed out that I am getting 1.5 percent interest on the balance and the average yearly return of the "dogs of the Dow" for the last thirty years is above 20 percent. As a contrarian I look at the sentiment of the market. When the majority are bears it will be bullish and when the bulls are snorting the bears will take over. This is because people announce their positions after they have taken them. When everyone is a bear there isn't anyone left to sell and the bulls take over. When they are bulls there is no one left to buy. With the market high and the bearish outlook heard everywhere this is telling me a lot of people are in cash and are missing the bull run. When these people get back in they will be telling us the market is going higher and it will be time to short. Coz