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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (8037)	9/19/1998 7:29:00 PM
From: dougjn	Read Replies (1) \| Respond to of 42834

Sonki, I think BB has lots of mkt wisdom and certainly has been a good and steady hand until at least the last several weeks. I largely finished getting out by the beginning of Aug. Though I've traded the panics and rallies since. My question about BB these days is that his model and outlook seem to only consider conditions we've had since WWII. Yet evidence has become undeniable that the current situation is at least potentially unlike anything since WWII. And more like periods before then. Talking of course about deflationary environment in Asia, Russia, and now perhaps? hitting LatAm. Frequent causes of recessions and worse before WWII. Unknown since. Sea changes to occur. Rarely, but sometimes. Without a weak Asia just starting into deflation a year ago we would have had no offset to rising wages and other inflation pressures. Commodities like oil, metals, grains would not be so down. Inflation would be rising, as would Fed fund rates. So Bob's model, after this very long strong bull would have looked at those rates, valuation levels and sentiment and screamed sell. And it would have rightly predicted a normal contraction after a long strong bull. So now BB thinks we are in a soft landing slight slowdown due to Asia. Could be. But I don't think his model, or his perspective, know how to read this situation. Deflation overseas which might just cause continued disinflation here -- or could bring a recession, whether slight, average or severe. Who knows?? I don't think anyone really knows. I also keep listening for some wise insights from BB on all this and I don't hear them. Basically he's just saying my models say OK and giving the we're a supertanker view, squibbed from AJC. I don't know either but I sure don't think we are going to get a confident goldilocks mood, and attendant valuations, again for some time. With it so long since the last bear, enormous amounts of capital spending have built up production capacity to high levels in most US industries as a result; there are still very high valuations levels in the indexes and leaders; estimates for 99 still not down much from quite high levels in most leading companies; deflation is spreading rather than stabilizing overseas with growing effects on a widening # of companies here; currency collapses and financial system panics still threaten in several places; and even the Y2k business (which I tend to think is overplayed here by may well not be in many other countries, including Japan and Europe) draws close. Seem to me the chances of a recession of some sort are something one cannot just shrug off. And whose risk the market has so far little factored in. Only slower profits. So I am mostly a buy the panics and sell the rallies trader these days, with some tenacious old long term gainers. I have not been of this mind since 92, and then less so. You? Is this too cautious? Doug