To: John Mansfield who wrote (1858 ) 5/17/1998 11:57:00 PM From: AHale Read Replies (1) | Respond to
I personally agree with those who claim we are in the midst of a stock market "mania," as opposed to a bull market. (see www.stocksite.com, April 11, 1998 issue contained in the "archive"). This stock market mania will end, at some point, with a crash, or something close to it. Now, lets talk about the Y2K problem. I diligently read all the posts I can in many y2k sites and am convinced that the problem will be devastating. There is simply no way it can all get done. Remember, this is a global economy. Even if every U.S. company made it on time (which will never happen, especially for government agencies such as the IRS, etc.), you have to consider the foreign nations who are way behind. Do you think Indonesia is worried about y2k at the moment? What about India or Pakistan? What about Europe with all the distractions regarding the conversion to the euro. These countries are way behind the U.S., and the U.S. is way behind. Having said all this, I think y2k will take down the stock market, if the mania does not exhaust by then by itself. I think the crash will be enormous, with the dow plummeting to 4000 or below (this is purely my speculation). You can't purchase leap puts on the dow or S&P 500 at such a low figure. The lowest dow put for dec 00 is 64 (6400), and it currently trades for 2 and 3/8. The lowest S&P 500 put for dec 00 is 70 (700) and it currently trades for 1 and 15/16. Since I believe that the market will go well below these figures, I am buying these puts. If I'm correct, I'll get the most bang for my buck by far. Finally, I do not know how long it will take for the market to react. I think Dec 99 may be too early. Thus, I give myself another whole year of chaos by going with dec 00. There are hundreds of reasons why I think the problem is so significant. That is the subject of another post. P.S.- my biggest fear is being able to collect my money when the dust settles!
