To: Don Green who wrote (15661 ) 6/2/1999 9:06:00 PM From: pater tenebrarum Read Replies (1) | Respond to
Don, the problem with these ingrained investor reflexes is precisely that bear markets tend to strike when least expected. the 1920's are a powerful analogy, as it was a mania as well, which was similarly beset by several sharp breaks along the way, all of which were followed by equally sharp recoveries and subsequent new highs. when the reckoning finally came, almost nobody recognized it as such at first and the usual recovery was initially widely expected. back then, people were basing their hopes on what was called 'organized support' by bankers and investment trusts. indeed the bankers tried to support the market at first and failed. today, everybody relies on the fed to bail us out when in trouble, and it is probably a somewhat safer bet. i do agree that a slow downward grind is probably more dangerous for the bull market than a swift climactic decline. please note that i am not a perma-bear and have defended a bullish stance for as long as my indicators told me to. i am generally happier with rising than falling markets and my caution at this time is based on what i see. i will be turning bullish once more when i see good reason for it. btw, even if the market stays under pressure, it will afford us opportunities for profit no doubt. for some time i have been expecting a true blow-off top to mark the end of the bull market and was looking for even higher prices than we have seen. perhaps when the correction is over, another run to new highs will be in the offing. as i said before, it wouldn't do to underestimate the durability of the mania. as SO always says, time will tell...
