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

To: Joey Two-Cents who wrote (7892)	4/27/1998 7:41:00 AM
From: Pancho Villa	Read Replies (2) \| Respond to of 18691

TJC: Yes, I think the Asian crisis will come back as a theme of concern in Wall Street as of this week. Will this be the excuse for bubble puncture? At the very least we should see significant downward volatility. The consensus is that 98 earnings will be lower than 97's. Downward trends in earnings are difficult to reverse. The view of MFMs (mutual fund managers) is that their mandate is to stay fully invested - this now a days means no more than 5% cash. Their view is that market timing does not work and investors wishing to market-time can just sell their MF shares. However, if MF holders sell they will have to liquidate. IMO the selling catalyst that may start the reaction is a combination of institutional players/hedge funds/individual investors/foreign investors. Once MF investors see their NAV declining by the day they may decide to sell thier MF shares, and the MFMs will have to sell stock. It looks like direct stock ownership has increased significantly (I don't have the hard data to justify this, just empirical observation) and these folks are nervous. Many have seen some of their longs crash already, fear may be starting to set in. Some one here said Soros had made a significant April put option play on the market. His timing may have been just a bit too early. Pancho