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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (5495)	8/31/1998 2:33:00 PM
From: JZGalt	Read Replies (2) \| Respond to of 18928

Tom, thread, before you get too excited about the IW numbers I think I should remind you that this is likely to be a pullback unlike any other we have seen in our investing lifetimes. This pullback will be driven via lack of earnings growth, not lack of earnings growth on top of inflation. You should have heard by now that "Bull markets do not die without an uptick in interest rates!" That has been true for at least as long as I have data going back to the mid-1960's, but with the exception of the early 1990's you also needed earnings growth to continue a healthy market. I'm not trying to scare anyone, just reminding people that this market is reacting to the possibility of a huge contraction in global economic activity. If that doesn't occur, great! we have all bought some very cheap stocks. However if you sink a heft percentage of the world into hyperinflation, recession and depression, there is less of a chance that the US economy can continue to expand. Right now I am just a bit on margin, because the meltdown doomsday scenerio is unthinkable, but at this point in time, I see no reason to max out that margin capability. Wait and raise cash if you are uncomfortable. ---- Dave

To: OldAIMGuy who wrote (5495)	9/1/1998 3:58:00 AM
From: Bruce A. Bowman	Read Replies (1) \| Respond to of 18928

Hi Tom- Some of those persistent top performers took their lumps today, didn't they? amazon.com closed at 83.750 I believe. That's about 53.750 pts. in 4 days or about 40%. Yikes!! Talk about some overhead to work through to come back. EGRP is down 35% in the same number of days, though the erosion started even before that. It's down 44% from an intermediate high 13 trading days ago. There's some serious technical damage to repair before many of these favorites are going to fly again. All this thrashing is doing a good job on the IW, painful as it is. The crystal ball stuff I play with once in awhile is not being very helpful... or at least it isn't saying anything I want to hear! :-) If I had to guess, I'd say that if INTC is representative of the semis as a whole, then they're in for another couple days of ugly. No clue where other sectors might go. For my part, I'm pondering how to handle my poor planning for this event and am wondering if I should close one or both of the 2 positions that are as yet (sort of) undamaged and prop up the (no longer walking) wounded, or if I should just continue my "wheat farmer" approach of doing almost nothing 'till the next harvest. I can see the potential for some profits, but because of the damage it could be a very long while before it comes to fruition. One thing about all this, some of the inflated PE ratios have gone thru a crash diet and are looking a little more lean! :-) But I really wasn't expecting the RUT to get killed quite as badly as it has... off almost 7% today alone. Guess it's the old risk/reward thing, isn't it? Bruce