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To: Sig who wrote (49776)	7/4/1998 12:29:00 AM
From: stock bull	Respond to of 176387

Sig, thanks for the information. I found it to be interesting. Have a good and sane fourth. Stock Bull

To: Sig who wrote (49776)	7/4/1998 4:52:00 AM
From: Chuzzlewit	Respond to of 176387

Good evening Sig, Thanks for a very amusing series of posts from the past. I found this part of your post quoting an old bear very interesting: After a month of good news on Dell and major money pouring in because of its addition to the S&P 500 (by index fund managers), there only remains bad news Why do I find it interesting? Because it is illustrative of one of the most common flaws in logical thinking about financial markets. Of course it begs the question by assuming its conclusion, but implicit in the argument is that old chestnut, "the law of averages". It assumes that there is some sort of constant ratio of good news to bad news. And if we've had a lot of good news lately, well hey, it can only get worse. But if these folks stopped for a moment to think about it, they'd see just how silly the argument is. Suppose you bought a crate of oranges, and all of the fruit on the top layer were bad, would you argue that that must imply that the fruit underneath is good simply to satisfy some botanical law of averages? I would argue that the probability of finding additional bad fruit is enhanced. In investing we must differentiate between statistically independent events, and those events that have implications for the future, and the nature of those implications. When a company wins new accounts that increases the probability that it will win additional sales. Why? because the company's goods or services were found acceptable by at least one group of new buyers, which argues that its competitive position has been strengthened. That is definitely not evidence that it must lose another account somewhere to satisfy some financial variant of the law of averages. Have a happy and sane 4th. TTFN, CTC

To: Sig who wrote (49776)	7/4/1998 8:41:00 AM
From: Jerry Miller	Respond to of 176387

that was a lot of good work. thanks.

To: Sig who wrote (49776)	7/4/1998 10:28:00 AM
From: Tweaker	Read Replies (1) \| Respond to of 176387

3, sig & Chuz; Thanks for the great posts. I already know most of what you said but lack the ability to articulate it in such a fine fashion. As positive as your remarks are you must admit that as we approach post #50000 we are going to meet with some resistance. I am not suggesting that you sell DELL, but be careful! Has anyone heard of the DOW 10000 bug? Many financial programs will crash when the DOW adds another digit. I'm serious! Have a nice weekend and thanks again for all the great post. Phil