Detoxing the Markets: Bears Still Look Hungry

Source: www.thestreet.com ^ | 07/16/2002 | By Peter Eavis

[Neets]

If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have $16.50 of the original $1,000.00.

With Worldcom, you would have less than $5.00 left.

If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.

Based on the above, my current investment advice is to drink heavily and recycle.

[technochick99]

I agree. I don't think there's much to be gained from an average person watching the market on an hourly, or even daily, basis and trying to make sense of it. Perhaps some people are just a wee bit obsessive....

[Dog Gone]

Japan is not publicly complaining, but they are intervening in the currency market to keep the yen from rising above 115 yen to the dollar. The last thing they want is for their exports to us to be too expensive.

I don't think they can win the battle of the printing press, although they may try.

The only danger is that we may print more dollars than the goods we produce, which is inflationary, of course.

[habs4ever]

Shrewd advice!! Go long booze, short sleep ;-)

[.38sw]

And buy Budweiser. I own a few shares of Bud.

[Southack]

I agree, except that Japan should be running up inflation by turning their printing presses on High in order to make their exports cheaper and encourage people in Japan to invest rather than hoard their money as they are currently doing.

They still haven't figured out that it is the velocity of money that makes or breaks their prosperity.

Just as in South America where the super-rich hoard their money rather than cycle it, the low money-turnover-speed in Japan (among average Japanese citizens) is the cause of their continued economic doldrums.

But start running up just a little bit of inflation (not so much that people switch the currency on their savings), and then people either have to spend their money to "get something for it" or else they will lose the value of their money by sitting on it.

[Lazamataz]

I never claimed to be creative, just tedious and screechingly annoying.

[#3Fan]

Bears still chomping bump

I still have half my money in my 401k. I don't want to look.

[Moonman62]

This is on purpose. They are trying to devalue the dollar and reflate the price level in order to offset the deflationary devestation they themselves created with the "strong-dollar"/tight money policy. We need inflation just to get prices back where they should be.

I kind of have my doubts about that. First, while Greenspan is politically brilliant, he is economically clueless, and his role in the strong dollar was an unintended consequence of his war against economic growth and full employment. If it weren't for 911, Greenspan would still have a tight monetary policy to combat the mythical "wealth effect." Second, the weak dollar isn't just liquidity driven. It's also driven by investors seeing diminishing prospects for any sort of significant economic growth in the US. Third, consummate demand manager Bush wants a weak dollar so that farm exports can lead us to his idea of prosperity, I kid you not.

[Wyatt's Torch]

Not going to argue the last two because you are correct. For the first, for the last five years I felt the same way. But I think Greenspan has learned his lesson and informally re-adopted his old gold-price rule. I may be reaching but with the influx of cash over the last 9 months (huge spike and then withdrawal after 9-11) can't be coincidental. Perhaps I'm giving him too much credit and the Fed is only defending their 1.75% FF rate.

[steveegg]

You did notice my caveat about more Enrons showing up in the news. I strongly believe that to be the case, so we're well above bottom (Dow 4000, NASDAQ 600 and S&P 350 by mid-October, anyone?). I'm not going to say how many more Enrons it's going to take, only that I think there's that many out there.

FWIW, outside of my 401(k), which has a long way to go before I near retirement and is as diversified as it can be, I'm nowhere near this market, and if I had some spare money, it'd be waiting in a passbook account waiting for the November elections (it would get a pittance of a return, and I would still be able to pull it out in the event of market bottom being hit).

[steveegg]

Is today "digestion day" for the bears? The major indexes' futures (as reported by CNN, the only place I have been able to find the futures numbers) have the Dow up 87, NASDAQ up 17 and S&P up 9.

Uurp! <VBG>

[Lazamataz]

This is fun. Because I am not exposed in the market, besides a 401k that is not to be touched for 25 years or more, predicting the daily trends for me is kinda my version of Football or Horse Racing.

I think today might be a regroup day. Sharply higher open, then settling back down to middling levels.

Of course, these daily predictions are a hell of a lot less accurate than longer term ones.

[steveegg]

As long as I remember not to open my quarterly 401k mail, I'm all right. I usually stick with football (how are the Bears looking, BTW? :) , but since training camp isn't open yet,....

The bears will be back hungry tomorrow. It must be the Midwest air that causes us to think alike.

Who has the thread duties today? I don't have any good links, so I'm out.

[Lazamataz]

I usually stick with football (how are the Bears looking, BTW? :)

I don't do football.

I do stocks or computer games or training my animals, ANYTHING but football.

What a waste of a pig!

[steveegg]

Oh well, nobody's perfect :)

CNBC on and waiting for the opening bell. I've got Dow up 35, NASDAQ up 7 and S&P up 2 inside of 5 minutes.

[steveegg]

I was a bit pessimistic (that's the bear in me). Dow opened up 66, Nasdaq up 39 and S&P up 8 (hey, at least I was close on S&P). Enjoy the bubble.

[Little Bush]

Hey, was I the only person on the planet who knew the dot-com crash would come? What goes up always comes down. I was actually very surprised it lasted as long as it did.

[steveegg]

Anyone who remembered the old rules of stocks knew that the bubble would burst. What you and I forgot to factor in was the political factor (S(l)ick Willie needing a large, long-lasting bubble to survive).

Dow +224
NASDAQ +49
S&P +21
Curbs are in (can't have a wild one-day swing back up, can we?).

[steveegg]

You're off by a day, but if you're a day-trader, you had best have bought yesterday afternoon.