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

To: LTK007 who wrote (15333)	3/28/1998 12:22:00 AM
From: Bonnie Bear	Read Replies (2) \| Respond to of 94695

IF they could time it so that a mass dumping of US bonds by the Japanese is synched with a mass rush to bonds by disillusioned US investors seeking a flight to quality, it would be a wonderful thing for Mr G, who really doesn't want to mess with interest rates.;-) The whole scene is just too conveniently timed. I'm suspicious. I'm down in the microcap trenches- the valuations are still very reasonable, I can find stocks at book value. If this were really the end I would expect the microcaps to be bid up, but it hasn't happened. The scary part is that we could end up in the same boat as Asia, with raging interest rates and devalued currency, property price collapse in the urban areas, and mass increase in unemployment. It just doesn't look like deflation to me. It looks like hyperinflation and the potential for currency crisis. Chapter 9-8 in my macroecon book is titled" Recession as a cure for inflation". I think I'll go study up!

To: LTK007 who wrote (15333)	3/28/1998 8:51:00 AM
From: Bonnie Bear	Read Replies (1) \| Respond to of 94695

max: history suggests that an oil price shock and related recession is the most likely cause of death of a bull market. Drillers are cheap, maybe they are a best buy. So are microcap financials, and their earnings are screaming right now- little title and insurance companies, microcap brokerages, microcap S&Ls. I'm inclined to just move more cash into this sector, hedge it with a bit of cheap drilling stocks and gold, and trade techs. It just feels dangerous to be too much in cash right now, and believe me it's tough for a permabear to say this! Money has lots of places to go: microcap financials, drillers, mining stocks, latin american stocks, healthcare stocks, a flood of new Chinese ADRs hitting the street soon, microcap specialty techs. The equitization of Europe could be just beginning. I do think there's a real possibility that the dollar is devalued against the Euro. The pundits try to blame the market on the greed of the little guy in the street. I'd blame it on the greed of big business moguls who get paid on incentives to make the stock price go up, and pension managers who get paid on volume rather than quality. I have grave doubts that pension money will be there when I retire- I'm inclined to think that we'll have a pension funding crisis instead of a Social Security funds crisis in 25 years. The pensions are betting on growth in India and China to keep the Ponzi scheme going.