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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Ron Bower who wrote (4566)	8/1/1998 8:09:00 PM
From: James Clarke	Read Replies (2) \| Respond to of 78667

Stay the course, no matter how hard it seems now. I figure I am about 30-40% exposed to the market right now, and am very happy about that. I cover a broad range of stocks professionally and watch a lot more, and I am stunned amazed baffled, choose your word, that these are down 20-40% while "the market" is still within 10% of its high. Perfectly good companies are being thrown away by portfolio managers who think they have to get into the "perfomers" (GE, MSFT, KO...the list is getting very narrow) A week ago it would have included PG. A quarter ago it would have included MRK and G. Six months ago it would have included K. Look at some charts on those. When a market gets narrower and narrower, eventually everybody is investing in the same stocks, and then the whole game goes poof. My value investing firm has stayed the course religiously, and we were rewarded for it by losing our three biggest clients in the last six months. And its not just us. If you are an institutional value investor, your clients are demanding that you make this stop - but going into cash or utilities is forbidden. So if you are a profit maximizing human being, but are also scared to death, you sell New Holland and buy GE, even though you know there is every possibility the same client is going to be hammering you for that decision three months from now when GE is at 60. We are in a mania...and at the same time we are in a bear market. This is an accident waiting to happen.