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Pastimes : Prudent Bear Fund (BEARX): contrarian investing -- Ignore unavailable to you. Want to Upgrade?

To: MSPutnam who wrote (436)	11/6/1998 10:48:00 AM
From: HB	Read Replies (1) \| Respond to of 793

Glad to hear Tice has some gold. I have been very slowly DCAing back into BEARX over the last few weeks, reducing longs, flipping some of my dips into semi cap equipment and biotech, but am nowhere near having reestabilished my peak BEARX position. I think it's about 50/50 at this point whether we go ballistic towards 10,000, or start to sink. We do seem to be at a point where "lots" of people are sure the bear market is over, we're heading for 10K, etc.., so it may be time to dip a little. Danger of recessions in US and Europe, yeah; monetary authorities showing they are willing to deal with them, yeah also; low commodities prices make it relatively easy for US to do so without high inflation cost. Also Zeev Hed thinks our monetary policy is actually fairly restrictive (high real rates due to low inflation), giving fed more easing room than people think. Still, some inflation should show up as Asia recovers (while increasing exports to us), and eventually their demand for commodities turns up, as do their currencies, while we are still experiencing the effects of monetary easing. Maybe this is what gold and bonds are anticipating. I think it's not serious over the next few months though, but may kick in a 6mos--a year timeframe. Once all the good news is out, though, we may not need much bad news to start sliding from these valuations probably slowly (but with increased volatility). Then maybe China gives us a kick in the pants, or Japan experiences setbacks. Sort of a mushy view, but I think it justifies my mushy policy of getting back into BEARX... but slowly. (I will try to put in some bigger chunks if/when things seem to be getting really insane). Cheers, HB