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

To: Chip McVickar who wrote (18483)	5/14/1998 1:45:00 PM
From: Arik T.G.	Read Replies (3) \| Respond to of 94695

Chip, 1. Bubble The main feature of a bubble is very extensive public participation. Looks to me this is met in full. Another is lack of risk assessment by the participating public. Judge for yourself. 2. Economics The great shape of US economy is apparent. This is why the bubble exists. Luring the public into putting all its savings into overpriced equities can only be achieved when the economic #s and the secular bull support it. Ten years ago the #s looked great for Japan. It was after two decades of secular growth and a feeling of domination of the world that the Japanes bubble was inflated and eventually deflated. Yes, I know the differences between Japan and the US, this was only a reminder of the mental state of the public rushing into equities during a bubble. Invincible? Euphoric? 3. Economics part 2 IMO a substantial drop in the indices (25% and more) would take the economy down with the market. Once the bubble bursts, it will trigger depression, not unlike the big depression triggered by the crash of '29. Like the flaws in the Japanes economy, exposed only years after the bubble started deflating, the flaws in the US economy- extreme personal debt, overcapacity and others that will only be known in hindsight- will be exposed only after the depression will uncover them. And now I ask you the question- Assuming you where now 100% in cash, would you be buying GE, KO, MSFT, INTC etc. for long term holding, and what portion of your cash would you put into them? Forget taxing, buy and hold, Warren B. and all that BS. If the answer is 20%, then you should be only 20% in equities. ATG