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To: bananawind who wrote (14838)	9/10/1998 5:56:00 PM
From: dougjn	Respond to of 152472

Well, I decided about four weeks ago that we were probably headed into a bear market and sold most things over the course of about a week as a result. I decided there was a lot of potential downside, and at most a level trading market upside, so I had better start selling rallies. And that if a rally kept going and got away from me, it was very probably gonna come back to me within a month or two at the most. Ramsey I think decided closer to the top in most stocks than I did. I certainly lost a healthy chunk of my best gains. But saved a lot from current prices, that's for sure. The disconnect, and indication of the inflection point to me, was that the market was not taking the possibility of an outright recession originating from excess capacity deflation very seriously. The debate was between a general slowdown, and a slowdown limited to only some industries with lots of Asian exposure. I kept noticing that the frame of reference of nearly all the talking heads was "Since World War II". Well, the world, and even the American world didn't begin after WWII. And the closest analog to what was happening that I had some detailed historical knowledge of was 1920's leading to the 30's. Which everyone refused to talk about, because it was so scary. Which got me to thinking and looking. Turns out before WWII we had all sorts of deflation originated recessions. In fact, that's how most started back then. Seemed real possible to me again. I mean, how regulated are world capital flows these days? Maybe the new global capital flows and economy are, overall, no more regulated and moderated now than in the Pre WWII U.S. capitalism days. Given the expansion of the Global, extra-governmental, component. Didn't mean a great depression had to result. But did mean there was a very real danger of some sort of recession even though interest rates weren't going up. Our markets weren't then (at Dow 8200 or so) and aren't now, discounting the likelihood of a recession. Or even a strong possibility of one. Some slowdown, and continued financial scares, yes. Which suggested lots of downside to me. I think there could be lots of downside from here. But maybe we'll see 8000 again before 7000. On the way to something in the mid to low 6000's. Who knows? As the market just started to price a real slowdown in, I jumped mostly out. Thought a lot bad of bad stuff was to come. Not in a straight line. Have basically only traded since. Now this could be wrong. Today could be the bottom. Probably is very close to a near term bottom. But I personally think it is very likely that the market will come to price the LIKLIHOOD of a recession in before it stops going down. Whether we actually have one or not, I just don't know. Might escape with a no grow period. IMHO only, of course. This doesn't make me happy. I far prefer being bullish. And I find it hard to make much money in periods like this. So far only dribs here and drabs there. Before my unfortunate three day speculation in G*, that is. L Well, at least I got back into it again on Friday fairly cheap, at 15+. And a whole lot cheaper than I had previously sold. Doug