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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (661)	4/18/1998 4:29:00 PM
From: FJV	Read Replies (2) \| Respond to of 1720

Rainier, Greetings from a fellow King County resident (Bellevue, aka Blahview, land of the Volvos). I have been a VERY occasional poster (read lurker) on SI and on this thread, but I must say that I very much admire and appreciate your effort and astuteness in analyzing this market (both FA and TA). Your comparisons of this market with US 1929 and 1987, and the recent bear in Japan speaks to the ultimate dilemma I have been experiencing lately. The fear of being committed long when the bubble bursts in this "almost tulip" market is as strong as the fear of missing out on so many great opportunities in communications, biotech, etc. Your erudite and thoughtful insight into a variety of these opportunities is a breath of fresh air in this otherwise hype ridden forum (with some notable exceptions such as Iqbal Latif and his followers). So thank you for your tireless effort to bring relatively ignorant investors such as myself the benefits of your considerable knowledge and wisdom about this very frustrating stock market. Congrats on your ST call on OMGA. Now that the stock has reached your $5 target how are going to play it from here on a short and intermediate term? TIA for your response. Regards, Franco

To: HeyRainier who wrote (661)	4/18/1998 10:21:00 PM
From: ftth	Read Replies (4) \| Respond to of 1720

[IPO's] In light of the stratospheric first-day jump for BRCM's IPO, and the earnings-less search engines being priced for next century's expectations, this is an interesting article (kind of long) on the failed IPO of Wired Ventures, the parent company of search engine HotBot and WIRED magazine: inc.com

To: HeyRainier who wrote (661)	4/20/1998 1:57:00 AM
From: Robert Graham	Read Replies (1) \| Respond to of 1720

[Market Analysis] The current bull run is being fueled by unprecedented market liquidity, not an extremely high degree of speculator exuberance. That is why IMO no one can call this current market a "bubble" or "blow off" which implies a sentiment driven market. Now once the liquidity dries up to what can be considered more "normal" levels and the market continues its pace, then you may have something here. Given last year's market activity, I would not be surprised if this will turn into a speculative "bubble". The liquidity driven market and its "elevator" effect is not helping here the adoption of a conservative posture by the public. This will also be a period of much higher volatility when the inflow of money from the funds tapers off. The technicals would then start to behave in a more familiar way for instance as in last years bull run. Now last year's market was a more sentiment driven market as the market unfolded. Even the "experts" were publically saying that inflation was beat and we will never have another recession. It pays to watch the market fundamentals which have changed significantly in this market. Because of the different fundamental nature of the market, technicals have been responding differently and need to be interpeted accordingly. Many technicians have been caught off guard when they see a technically weakening picture of an overbought market even with slowing price momentum, yet the market continues to go up after a minor pullback, even in the same day of the pullback. One technician of note here at SI actually pulled his money out for a long period of time compared with his short term trading status to find no major market correction. He then has placed his money back into the market. He was initially predicting for the DJIA to reach below 7000, which was later amended to a much more reasonable figure. That tells me he has never been in a liquidity driven market before which tells me he has less than 10 years experience following the market, even though he claims much more experience. For once a market follower has experienced a liquidity driven market like this one is, they never forget the experience. Price patterns are different and very characteristic as for instance the DJIA has been demonstrating. Here you have foreign money like a "water fall" moving into blue chips of the Dow and our bonds. Then you have all that fund money that was on the side in the form of bonds and money markets during the November correction that has been moving back into the market this year. Remember that as far as institutions go, we are talking about over 2.5 trillion dollars which can cause large tides and float many boats. Now you have money on the side due to sector rotation of the funds and a record $37 billion just in money inflow into funds from last month alone. This money needs a place to go and the funds will not keep it in cash for long due to the competative nature of the mutual fund business and the shorter term thinking they have been adopting as this bull market has been progressing. The index to watch right now due to the liquidity from the funds is the S&P 500. I would place more emphasis in this type of market on price patterns and the comparison of different segments of the market such as the sector indices in order to track the "big money" movement of the mutual funds. Once this "big money" is more fully invested and the "rich" inflows to mutuals dry up, the market will then in the hands of the public which will have the opportunity to take the market up further. This is where market sentiment will take on a larger role. I think Friday we may have seen evidence of fund money starting to move back into the market, but the market volatility found during double witching may be skewing the results. I think next week will be revealing in this respect as to the disposition of fund money. Still a bit premature to tell even if Friday's action on the S&P 500 was significant. Just my opinion of course. Comments welcome. Keep up the excellent posts, Rainier. I enjoy reading them. Bob Graham