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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (2575)	1/19/1999 1:07:00 AM
From: Stephen O	Respond to of 3339

David here it is Capital Growth Topics # 258: Mania! It is said, or so we have heard, that none may count the angels dancing on the head of a pin. So how are we to count the e-traders dancing on top of Yahoo!? The plain and simple truth of the matter is that we are in the midst of a mania, a classic mania. It is full-blown enough to eclipse any other post- WWII mania in this country. Indeed, the only bubble we can remember of similar proportions was Japan, and nine years later one can still hear the air leaking out of that one. We all seem to be in a hurry to call the top. To my mind we should instead be focused on investing while the going is good, for a bear market will follow this bubble, just as bear markets have followed all other bubbles we know of. And that bear market will not be like last year's correction, with a surge to new highs coming close on the heals of an 18% decline. No, it will be the real thing; a rip-snorting, terror-inducing panic that will cover time and price in size. By the time the bear market is over the few remaining brokers will be lonely. Blue-chip stocks will go begging at huge yields. No one will want to invest in anything. Volume will be nil. The NYSE's new building will be seen as a folly. There will be no SOSE bandits to carp about. The two or three market makers left in business will be very good at crossword puzzles. You will be glad there are specialists, as there will be someone to trade with. Your order desk will thank you for your order. No one will be talking about investing part of the social security fund in stocks. In short, the bear market will have served its proper function, not only eliminating the excesses, but preparing the way for the next bull market by making a clean sweep of the markets. Oh, we almost forgot; there will be no place to hide. Indeed, few of today's market participants will be left to play again after the bear has finished. Those that are, will have newfound respect for the markets. Watch closely, you are witnessing a very rare event, a bubble of mammoth proportions. You'll be able to tell you grandkids about this one, that is if they haven't lynched you for losing the family fortune. But that's then, and this is now, so invest we must for the rainy day. John Bollinger, CFA, CMT 15 January 1999 Entire contents copyright 1999. On February 27, 1999 we will present a one-day seminar in Los Angeles, "Trading with Bollinger Bands." For stock ratings: equitytrader.com For a free sample issue of the Capital Growth Letter or Group Power: bollingerbands.com Bollinger Capital Management provides technically-driven research and money-management services. Voice: (310) 798-8855 Fax: (310) 798-8858 S-mail: PO Box 3358, Manhattan Beach, California 90266. E-mail: BBands@msn.com ****************** ABOUT JOHN BOLLINGER JOHN BOLLINGER, CFA, CMT is best known for his ten years as Financial News Network's Chief Market Analyst and for his market commentary on CNBC. He has published the Capital Growth Letter since 1988 and is President of Bollinger Capital Management. JOHN BOLLINGER'S CAPITAL GROWTH LETTER is a monthly newsletter for the individual investor. Covered are stocks, bonds, precious metals, commodities, the dollar and the international markets. The newsletter utilizes a technically driven asset allocation approach and investment recommendations are based on a combination of technical and fundamental analysis. Each issue provides charts, analysis and commentary on the markets as well as investment recommendations. A free twice-a-week Hotline is available to all subscribers. SUBSCRIPTION INFORMATION $225 - One year (12 issues) $49 - Three month Trial SUBSCRIPTIONS ONLY: Call 1-800-888-8400, ext. 84 BOLLINGER CAPITAL MANAGEMENT is an investment management company that provides technically driven money management services to individuals and pension plans. John Bollinger, CFA, CMT is the principal investment officer and governs all investment decisions. Two management programs are offered. The first is a total return approach (minimum account size $250,000) and the second is a mutual fund switching program (minimum account size $50,000). For information on Bollinger Capital Management or a sample copy of John Bollinger's Capital Growth Letter please contact us: Voice (310) 798-8855 Fax (310) 798-8858 Mail PO Box 3358, Manhattan Beach, California 90266. E-mail bbands@ix.netcom.com