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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: drakes353 who wrote (3107)	9/28/1998 5:12:00 PM
From: Ken Brown	Read Replies (1) \| Respond to of 4634

This century I think there have only been two times where a 20% whack was followed by an additional 20+% whack ('29-'32 and '73-'74.) The other 20% whacks were followed by rip snorting bull markets. And EVERY time the market advanced 20% two years in a row, the 3rd year was lackluster by comparison. UNTIL 1997. History is not necessarily a good guide of the future. :-) Ken

To: drakes353 who wrote (3107)	9/29/1998 8:50:00 AM
From: craig crawford	Read Replies (1) \| Respond to of 4634

>> This century I think there have only been two times where a 20% whack was followed by an additional 20+% whack ('29-'32 and '73-'74.) The other 20% whacks were followed by rip snorting bull markets. << Hmm...what about 1987?

To: drakes353 who wrote (3107)	10/1/1998 6:48:00 AM
From: Mama Bear	Read Replies (1) \| Respond to of 4634

"Don't know about you but I think the toughest thing about investing is avoiding the "decision making based on most recent experience" trap. " I agree 100%. But my opinion on the direction of the market was formed in mid 1997 when I quit buying new longs and started buying 10 year treasuries with my long term money. I actively started net selling in February on '97. I think when I made the mistake above was in July when I did not sell when the S&P was near 1200, as was my plan. "Deflation is the new boogie man. Everyone but the Fed has been talking about it for months and months and months. Hmm, not by my definition of everyone. I have been hearing that the long bond couldn't go any lower since it was at 6 1/2%. I have been hearing many folks speak of potential wage inflation. The CPI is up less than 4% in the last 2 years, but the money supply has expanded by more than 25%. I believe we're already in the deflationary cycle. "If a DELL doubles again in the next 6 months will you be able to bring yourself to buy it?" From my experience as a trader I have learned to treat each trade individually. If I buy WXYZ at 10 and sell at 12, I will buy it back at 24 if I think that it's going higher. DELL is a different story. It reminds me too much of USRX in 1996. If it doubles from here I'd more likely think of it as a screaming short. "That's normal, it's called an asymetrical risk/return profile. A 20% return is "OK", a 20% whack is a disaster" Particularly if one's analysis is that the 20% whack is coming, and one has enough confidence that analysis. When corporate profits were expanding, I didn't have this worry. Now that it seems that everything is in oversupply, from gold to oil to hard drives to food. The only reason that I'm not willing to take the risk at this time is because I think the best case scenario is flat to moderately down performance. Interest rates are still trending down. A knowledge of history is well and good, but I am investing in the here and now. "One thing though, how will you know your thesis is wrong?" The economy won't weaken. Prices will rise instead of staying flat or falling. <g> That's a simplistic way of putting it, but it's kind of like obscenity. I can't necessarily define it here, but I think I'll know it when I see it. Barb