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To: Abner Hosmer who wrote (9949)	4/14/1998 3:21:00 PM
From: PaulM	Read Replies (2) \| Respond to of 116761

hello enigma.... I'm fairly certain we see a significant correction this year. The key probably lies in Gabriela's earlier post. Re: the economy, it is better than at any time since 60's. But the stock market is better than EVER. You must also be old enough to remeber that this had country has had equally LOW inflation, HIGHER growth, GREATER productivity, LOWER interest rates all with stock market PE's of 15-20. Although I do believe the CPI understates inflation, it is admittedly low. It's low because of demand for dollar denominated investments (like stocks) and therefore dollars. And that, in turn, is true because Europe has been in a downturn and Japan on the verge of a depression for years now. A significant devaluation of the dollar is all it would take for almost instant inflation. the problem with having lots of your stuff (like stocks and bonds) in the hands of foreigners is that they dump it when something better comes along or when they have to. For example, Japan now has to. It is resisting doing so only because of agreements with other industrialized countries--mainly the U.S.--but there has to be tit for tat. The U.S. will have to give in more as the situation in Japan worsens. So look to the upcoming G-7 and possible dollar devaluation as the trigger for the coming correction. And if the dollar isn't suffciently devalued, look to Japan for the trigger. Regards

To: Abner Hosmer who wrote (9949)	4/14/1998 4:32:00 PM
From: Enigma	Respond to of 116761

Thomas - I think you're right, and we are seeing a run at 10,000. What's difficult to fathom, and hard to get at, is how was sentiment and background data at the beginning of the severe bear market in 1973/4? These downturns must come when least expected. My guess, and of course it can only be a guess,is that we see a penetration of 10,000 perhaps for a short while, and then either a crash, or 1973/4 downturn. Now it seems that one has to play the odds a bit. Maybe one misses these last 100 points - so what? Especially if a correction takes us down to Dow 6,000 or even lower over the next 2 years. Are the odds better for a gold mutual fund to go up from here or the Dow to go down from here? One is only just up from 16 (?) year lows and firming, the other at all time highs almost daily. A prudent investor might be 15% gold, 20%, cash, 35% equities, 20% bonds. Something like that. For equities probably more in Europe than N. America, and for the brave some in Asia. Some Asian funds here were up 40% in Q1 1998, maybe that bounce back has stalled for now.. E.