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Strategies & Market Trends : Bear! -- Ignore unavailable to you. Want to Upgrade?

To: Michael Burry who wrote (21)	4/27/1998 11:47:00 PM
From: James Clarke	Respond to of 291

Da Bears! Mike, your timing is unbelievable. You start a bear thread just before everybody gets scared. I was smiling all day today (when I was alone) because I blew out over half my personal portfolio in the last month or so. My wife was calling me an idiot last week, but was very happy today. I am an institutional investor, so I talk to Wall Street analysts/strategists all the time, and I can't count how many time I have heard this: "A bear? Come on, everybody knows you don't get a bear market when interest rates are falling! What are you, stupid?" Well, today we heard the sound of that argument crashing to the ground. Oops, used the word "crashing". Didn't mean it. I kind of expect a slow, agonizing bear that will make everybody wish for a nice clean crash. A crash of 30% in one day wouldn't bother me much, but it wouldn't kill this "buy on dips" - any dips - idea that is so conventionally wise today. What will kill that notion is a nice slow burn, where the first 10% dip becomes a 15% dip, then a 20% dip. I figure once we break 20% off the top, the "buy on dips" geniuses will be terrified enough to buy from (of course a further 20% "dip"). You've got to be a little sadistic to be a bear today. (Maybe masochistic as well). Or maybe it just bounces back tomorrow as the "dips" buy and I go back to looking stupid.

To: Michael Burry who wrote (21)	4/28/1998 12:30:00 AM
From: Bonnie Bear	Respond to of 291

Mike: if you're willing to take some risk, the opportunity of a lifetime might be red-chip Chinese companies. Look at China Southern Airlines or Shanghai Petrochem and figure out what they're worth if they were Dow Stocks. It's scary. Pension plans for individuals in China and India must buy a Chinese or Indian index fund. Since this represents 50% of the world's population it's a good guess where the money flow is going in the next 20 years. Probably better to buy individual ADRs than CEFs. Schwab has a fund they call an international index fund, but they really just pick up on the trend du jour. IMHO it may be a good place to park a bit of money on a big dip, let their computers find the trend du jour. I think Chile and South Africa have low correlation to US. Government is missing something: Zachs show tech stocks like Cisco increasing at a 30% growth rate for the next five years. Do we have a perpetual motion machine where all of yuppie's after-tax income goes back to feed the stock market? Who's going to pay for it? Something bad seems inevitable: we will have a currency collapse of the US dollar when too many dollars floods the planet, we will have double-digit unemployment as companies dump droves of workers to pay for IS upgrades, we will have profits vanish to pay for IS upgrades, or we have the rise of trillion-dollar-market-cap global oligopolies that replace the various global governments and report to no one. The last is most frightening, and is increasingly cited among my co-workers as a reason to keep dumping money into stocks since they believe the government is powerless to control it and they are terrified to be left behind.

To: Michael Burry who wrote (21)	4/28/1998 12:33:00 AM
From: Ron Bower	Respond to of 291

Mike, What's it feel like to move monies just in time? You and James called it right IMO. The Asian markets are all off in reaction to the US markets as I write this. Very likely Europe will follow, then a reaction by US markets to those markets, etc. Likely a rough week for the markets and for bonds. You might look at ROC. Don't know if it's at a discount now or not. It was selling near 30% under. LOL, Ron

To: Michael Burry who wrote (21)	4/28/1998 9:56:00 AM
From: Ron Bower	Respond to of 291

Mike, IMO yesterday indicated strength in the Asian markets. It was expected that they would be off in reaction to the US markets and they were initially, then all but Japan rebounded to close higher. It appears they are so undervalued that they've reached support levels. Ron

To: Michael Burry who wrote (21)	4/28/1998 5:18:00 PM
From: Zach E.	Read Replies (1) \| Respond to of 291

Mike, I've enjoyed your posts (and articles) for quite a while now. I agree that the market is prime for a decent drop. This thread is similar in some ways to the millennium crash and kahuna threads, but the kahuna thread is more for short-term traders lately, and the millennium thread has a more "dow going to 800" tone. As for me, I think that the bear is likely to be deflationary. I respect the opinions of you and Bonnie, but feel that the Silicon Valley bubble economy is more of an aberration than a leading indicator. Check out the (dis)inflation graphs in a bunch of different consumables at yardeni.com . There is also an interesting valuation model there that compares the 10 year bond yield to the earnings yield of the S&P 500, it's been quite good for the past 15 years, at least. My meager portfolio is mostly in cash, I do have some DSWLF, thanks in part to you and all the other folks on the value and Deswell threads. Keep up the good work. Zach