Conference nyoss1::market_investing

It's nice to hear all the negative comments and predictions of correction ;-).

michael

Market timing requires an understanding Macro Economics; a subject that some of
us consider downright exciting. :-)  You need to understand where we are, how
we got here, why we are STILL here, an understanding of what it will take to
cause us to move away from here (up or down) and a lot of luck. 

Briefly, and I DO mean briefly.....

We have been Slooooooowly rising out of a recession.  That which drove the
recession to its depths was a new paridgm (I normally refuse to use that word)
as a result of the end of the "cold war".  The companies that fueled the
economy were no longer able to grow.  New companies and industries are coming
on line; hence the high growth in small capitalization equities. 

The "big" companies are "overpriced" in the traditional terms of P/E since
their earning are depressed.  However, since FMV/Share is an indication of the
hope of FUTURE earnings, they still sell high due to the belief that as we
continue to come out of the recession, their earnings will pick up.  Lately,
there have been a spate of Quarterly Reports showing increased earnings, but
those have been primarily due to cost-cutting and layoffs.  Market momentum
will continue, I suspect, only if companies continue to show increased earnings
due to REVENUE growth. 

Finally, the stock market is "the only game in town".  As long as people
believe they can get upwards of 10%/year MORE than in banks by investing in
Mutual Funds, for instance, they will pump their cash into the funds. Yup, it
is risky, but greed is second only to sex as a human motivator. The funds buy
shares. The buying causes the share prices to increase.  That increases the net
worth of the fund(s) and make them more attractive to investors.  Etc. 

If we were no longer suffering effects of a recession, I would be concerned
that the "top" (whatever that means) is near and that a correction is about to
happen.  As long as I continue to hear about layoffs across ALL industries and
I continue to hear about stalled housing starts and poor real estate markets (I
totally discount the positive PR from Real Estate shills who have been saying
since 1988 that the housing market has recovered), I have to believe that there
is considerable growth potential for our economy. 

All things being equal, economic growth potential SHOULD indicate opportunities
in the "stock market".   HOWEVER, the "market" moves on emotion as much as on
pragmatism (perhaps, more).  We are beginning to see a mad scramble of the
prognosticators to predict that the sky is about to fall (after all, they are
PAID to predict things).  If enough of them believe their own gloom and doom,
they will start selling off ....   and the sky WILL fall. 

As for timing individual investments it is simply (but not easily) a matter of
knowing the business of the company, knowing what market forces cause that 
industry/company to grow and keeping in touch with how the company is doing.  
With mutual funds, it is harder.  You had to understand the relative health of 
the companies that made up Ultra to know, for instance, just when in 1992 to 
bail out.  You also had to have done enough research to know where to put your 
money that it would do better than Ultra even when Ultra recovered it's climb.

So, and I repeat, market timing requires an understanding of where we are, how
we got here, why we are STILL here, an understanding of what it will take to
cause us to move away from here (up or down) and a lot of luck. 

Also, patience and nerves of steel.

And I could be wrong.

As Always, For What It's Worth,
Dave

    
    one thing about housing starts, Colorado Springs is having a boom,
    every piece of land is being built on and the County is swamped with
    rezoning requests for more multi-family land. My house is up around 20%
    over the past 12 months alone.
    
    The housing start stuff is very regional, in the MidWest I would love
    to buy stock in the construction business, like suppliers of shingles
    and cement etc etc
    
    Simon

re -.1

check out Lennar (NYSE:LEN)....my mutual fund has held it for the last two 
quaters.

/michael

    
    Placed simply I believe we are in for a correction this fall based on
     my readings in barrons, 2 newsletters, reading notesfiles/newsgroups,
     and most importantly talking to that investment guru - john hallyburton 
    
    The fidelity mutual funds I am in ( Equity Income II, Puritan,
    Balanced, Small Cap Stock, and Limited Term Municipal ) have all been
    steadily climbing the last 2-3 quarters - in particular the last 2
    months. My wife and I decided on a rule of thumb -
    
      "if a fund loose 5% of NAV in a week or 7% of NAV in a month - sell"
    
    Recall the 1987 slide really took 11 weeks before the friday/monday
    crash - that happened in the september/october time frame.
    
    I encourage any investor/trader to set stop loss rules/goals for all
    stocks and mutual funds ...
    
    your mileage/rules may differ -- these are rules work for us ...
    
    jim krieger

    an info tidbit per Jim Rogers (former mutual fund mgr,etc. now private
    investor). Every year this century the market has gone up the four days
    before Labor Day. So buy on this Friday and hold until next Friday
    (9/3). I'm not buying but I'm hanging onto what I have while I watch
    the exits.

    We watch the Dow closely because of the cascade effect of any sudden 
    change on our local market (Australia).
    
    Local investors are rewarding improved results, and are caning static,
    or negative performance; investors see no excuse for failure with 
    interest rates being so low.  The second-liners have really been the 
    star performers recently.
    
    I am very interested in the mass-psychology of financial markets; or to
    put it another way, how to predict and take advantage of changes in
    trends in market movements. Rather than write a book, I'll point you to 
    the feature article in the August issue of Smart Money which highlights 
    some interesting points of view; the current market is VERY different 
    from 1987, because the underlying fundamentals are different.
    
    My thoughts; The market will be sensitive in late September/October for 
    purely psychological reasons.  Be VERY sensitive to rises in long-term 
    interest rates.  If you're willing to take a risk, buy now, else wait 
    this period out, then Buy, Buy, Buy into any correction.  Invest for 
    superior real rates of return, and the capital gains will follow.  
    Remember, there's a huge pool of capital looking for a home with better
    returns.  Be selective; look toward each industry sector's better 
    performers; those that pay dividends -our market has rewarded companies
    that have emerged from the recession and resumed dividend payments.  
    Don't try to pick a winner from the dogs.  Use equity-options (puts) to 
    hedge your portfolio's value against any adverse changes; roll them 
    over, and lock in your gains !
    
    
    Happy investing;
    
    Cheers, 
    Peter.

    _The_Economist_ for August 14th has an article on mutual funds
    which makes interesting reading (page 74); there's also a side-bar
    with a graph on yield and S&P 500 values on page 75 (correctly
    done with a log scale!).  Excerpts follow:
    
    <Article>
    
    <Title> 
    Up and up until it popped
    
    <Subtitle>
    America's ageing baby-boomers are saving more and putting
    their money into fast-growing mutual funds.  How much cash
    can the securities markets absorb?
    
    <Text>
    It is the financial equivalent of the Gadarene swine: money
    is surging into America's mutual funds....There are now nearly
    twice as many funds as there are shares listed on the New York
    Stock Exchange...
    
    The mutual-fund bonanza has contributed to the decade-long bull
    market in financial assets...
    
    <side-bar>
    
    Hardly anyone denies that the American stockmarket is fully
    valued...
    
    Yet on one of the most fundamental measures of them all--dividend
    yield--the valuation of American shares looks perilous by historical
    standards...
    
    ...The bears should be patient.  They have most of the good
    theoretical arguments; only reality contradicts them.  And the
    reality is that mutual-fund money keeps pouring into the
    equity market and pushing share prices to record levels.
    
    <Graph shows S&P 500 from 1928 to 1993, using log scale.  S&P
    line is bracketed top and bottom by lines showing the index
    level that would produce a 3% dividend yield (top) and a 6%
    yield (bottom).  S&P line is just at or over the top bracketing
    line, as it was in 1929, 1936 and intermittently in 1966..1974.
    
    Graph clearly shows that worst likely case is a drop to an
    index value of about 200 (the 6% support bracket), and that
    prolonged sideways movement is just as likely as a drop.>
    
    		-John Bishop

    The Clintons have been on vacation?  As the summer recess comes to a
    close and the politicians get back to creating confusion, the market
    will certainly take a pause at these levels.  However, with worldwide
    interest rates on the decline where else could you get a return. 
    
    Take some profits now in the high flyers so that you have some cash on
    hand in early October to position for the year end rally.
    
    FWIW

Re: .9  

>Take some profits now in the high flyers so that you have some cash on
>hand in early October to position for the year end rally.


Sounds like good advice, however there is something that I'm confused
about. I am soley a mutual fund investor, and therefore pay a price to have
a "professional" portfolio manager make decisions about stock
purchases/sales, etc.   Should I not assume then, that the manager of a
fund would be moving into cash positions in anticipation of the coming
correction? If a portfolio manager of growth fund XYZ is moving into cash,
and I, in turn, am also "moving into cash" by selling XYZ fund shares and
depositing the proceeds into a money market account, aren't I just
replicating the fund manager's moves? 

I understand that how a fund is managed is determined, to a great extent,
on the type of fund and what is outlined in the prospectus.  However, I'd
like to think that someone who knows a lot more than I do is taking into
consideration the coming market drop and taking appropriate actions as fund
manager. 

So, this makes me wonder if I should do anything at all???

Diana 

    The trouble, of course, is that nobody knows the future.  Some people
    are expecting a market correction.  Some people are not.  If a majority
    of investing dollars was expecting a near term correction, and selling
    today, then you'd see that correction today, since the market is all
    supply and demand based.
    
    A growth mutual fund should that moves to a cash position will see a
    poorer return than other funds if the market goes up -- likewise a fund
    that stays fully invested in a declining market will do worse than
    funds that move into cash.
    
    So you'll find that practices vary from fund to fund.  I expect,
    however, that most 'mainstream' growth funds will try to stay pretty
    fully invested at all times.

   By diversifying into different mutual funds, Aggressive Growth, Growth,
  Growth and Income, Bond, International, Money markets and cash in the
  bank, what you are doing is hedging against the possibility that 
  managers of these funds goof up in their decision-making. In addition
  by moving from stock mutual funds -> bond mutual funds and back, you are
  playing the somewhat complementary relationship between the stock market
  and interest rates. The mutual fund managers are supposed to do this
  but you can, if you are risk-averse, further reduce your risk by doing
  multiple level diversification. If you are a Growth fund manager, there's only so
  much diversification  you can do without losing your identity as a growth 
  fund. As an individual you can do much better by diversifying the 
  diversification. But to take advantage of upward movements of particular types
  of funds, you should be prepared to sell them at the right time and buy
  up shares in a mutual fund type that is not doing so well. The best way
  to do this, I've found is to keep track of your fund returns by type
  using a package like Quicken or CA-Simply Money and making the right
  moves at appropriate times.
 
  Alternatively, you can try the "Scandinavian Chimp" approach to stock
  selection, where a chimp outperformed managers in stock selection. It
  accidentally picked a stock with a dart. This stock gained 44%. :-)

  Nari

    re: .10
    
    Also, don't forget that some funds, by their charter, have to be
    invested fully (100% in equities) all the time. These funds tend to get
    affected by market down truns (as well as up turns) more then others.
    So, if you are invested in these type of funds, you have to do the
    "moving" yourself to protect you from potential market corrections.
    
    Mike 

re>                      <<< Note 559.12 by SPECXN::KANNAN >>>
>                     -< Diversify the diversification.... >-
>   By diversifying into different mutual funds, Aggressive Growth, Growth,
>  Growth and Income, Bond, International, Money markets and cash in the
>  bank, what you are doing is hedging against the possibility that 
>  managers of these funds goof up in their decision-making. In addition

Absolutely not!!!!  

If that is what you are doing, you are putting your hard earned $$$ at extreme
risk.  Why not just go to a casino and play roulette?  At least if you spend
enough, often enough, they will give you a free room and meals. 

The money I have in Funds is invested in Growth, Aggressive Growth, Growth and
Income, Large CAP, Small Cap, Asset Management and High Yield Munis.  I pulled
out of International 2 years ago and will not get back in until I am convinced
the European recovery is real.  

EACH of those investment vehicles has had its ups and downs over the last few
years and almost without a miss, their cycles DID NOT coincide.  In all cases,
I picked the funds carefully and monitor their performance to see if they meet
their stated goals; when they don't, I move the money to other funds that I 
like.

The aggregate ANNUALIZED ROI of my Mutual Funds portfolio floats between 17%
and 24% and has done so consistently for the last 3 years. And, in my opinion,
NONE of the funds' managers has goofed; they have been successful in meeting
their funds' stated objectives - which is all I ask for. 

Again, and at risk of seeming boring, the only time you should plop your money
in ANY fund is if you have studied that fund, ascertained that it's goals and
objectives fit your requirments (which means you need to know what they are)
and that the manager has consistently met his/her objectives. 

An intelligently structured portfolio is built to withstand global, Macro
economic vagaries as well as timing misses by fund managers.  Since NOBODY can
accurately predict which sector of the any specific economy will do well/poor
and when, you hedge your bets through diversification.

>  Alternatively, you can try the "Scandinavian Chimp" approach to stock
>  selection, where a chimp outperformed managers in stock selection. It
>  accidentally picked a stock with a dart. This stock gained 44%. :-)

Glad to see the :-) at the end. That sort of sillines went out of vogue 20
years ago.  In ANY rising market, you can arbitrarily select stocks that will
do well - if you are lucky.  What these bozos never tell you is how many times
the darts select the dogs. I had a Financial Management Prof. rave on about
this.  We challanged him to prove it. Yes, his dart DID pick a stellar
performer; the other 4 darts cost him his family jewels. 

As Always, For What It's Worth...

Dave

  .14

   You say tomato, I say Tomahto....

	Re. .14

	> I pulled out of International 2 years ago and will not get back in 
	> until I am convinced the European recovery is real.  

	Too bad, you think that International = Europe. I have had money in
	two global/international funds for the last two years (Scudder
	Global and 20th Century International Equity) and both have done
	very well. 

>     <<< Note 559.16 by BROKE::SHAH "Amitabh "Leadership DECAF? Yuck!"" >>>
>
>	Re. .14
>
>	> I pulled out of International 2 years ago and will not get back in 
>	> until I am convinced the European recovery is real.  
>
>	Too bad, you think that International = Europe. I have had money in
>	two global/international funds for the last two years (Scudder
>	Global and 20th Century International Equity) and both have done
>	very well. 

Not at all.  I was invested in PACRIM during a very steep, and proffitable
climb (thank you, Japan Fund and others).  I got out when I felt I had a better
place to put the money that more adequately matched my changing objectives. 
All I had left of my international portfolio 2 years ago, was Europe, and it 
did not look promising.

Dave

Re. .14

> I pulled out of International 2 years ago and will not get back in 
> until I am convinced the European recovery is real.  

It's interesting, though, that the _perception_ of a European recovery seems
to be having a very positive effect.  Probably it's too soon to factor in a 
recovery, i.e., to discount the recovery into the market.  Yet that's what
seems to be happening.   Many Euro funds (and markets) have been very strong 
this year.  Is it possible that when the European recovery is proven to be 
real that the markets will have already factored that in and will have peaked?

    re. .16
    
    Shhh, keep it quiet. I'm also invested in 20th Century Intl Equity and
    it has got me thrilled...
    
    re. .17
    
    Why would you wait until you are convinced of the European recovery
    when there are other international markets out there -- Pacific Rim, 
    Latin America etc? It seems a good Internation Stock Fund manager 
    would have more of his/her portfolo invested in these geographies these
    days. Latin America and the Pacific Rim (not including Japan) seems to
    be where all the analyst are suggesting to be invested in these days.
    
    Finally, for those folks taking profits, how are you determing how much
    profit to take (just curious)?
    
    	
    Curt

re .19
>    Why would you wait until you are convinced of the European recovery
>    when there are other international markets out there -- Pacific Rim, 

I got out of International markets when, in my opinion, and consistent with MY
particular conservative objectives, I felt that money I had there would do
better elsewhere. I have no reason to regret those moves. 

>    Latin America etc? It seems a good Internation Stock Fund manager 
>    would have more of his/her portfolo invested in these geographies these
>    days. Latin America and the Pacific Rim (not including Japan) seems to
>    be where all the analyst are suggesting to be invested in these days.

That appears a valid presumption ASSUMING you are an International Stock Fund 
Manager.  I am not.  I manage the Cox Family Portfolios to maximize ROI while 
minimizing risk. I put our portfolios' in investment vehicles that will enhance 
our goals.  I provide financial advice to clients consistent with those goals.


As always, For What It's Worth...

Dave

    
    re: chimps vs Finance professors
    
    funny thing, though, the same finance professors say that if the chimp
    selects _enough_ stocks, that they'll perform as well on average as
    the finance professors themselves.  True or not, that _is_ the accepted
    academic view.
    
    /jim          

    re. 20
    
    >...I have no reason to regret those moves.
    
    I was invested in Scudder International Fund over the last 2 years. It
    was a dog with very little return. I got out about 6 months ago. I took
    that money and put it in 20th Century Intl Eq. It has returned 15% in
    less than 6 months. I'm hoping (praying) this has something to do with 
    the Fund Manager.
    
    Yes, the other world economies have been down. But don't you buy-in
    when they are down, so when they rise you are "in the money?" I admit
    the 2-3 year depression on returns from International Funds has been a 
    real drag.
    
    Historically, the international funds have paid like 12-14%/year ROI on 
    average. So my question is: Where do you get better returns (over the
    long term)?
    
    Just curious... because I'm trying to diversify my portfolio, in
    alignment with my goals (college costs are going through the roof - I
    need good returns!), and I'm wondering about your strategy.
     
    Curt

This is  the  substance  of mail  messages  I recently sent to other noters
who had similar questions.  For reasons noted in the next paragraph, I am
normally reluctant to go into anything near this much detail.  I do so now ONLY
as a matter of clarification and as "For What IT's Worth" generic comments. I
apologize if anything I offer in this notes file is misconstrued as an 
authoritative position. 

++++++++++++++++++
Normally, I provide very specific recommendations based on a thorough
understanding of the financial standing and objectives of my client(s); yes, I
do charge for this service. That may explain why many of my entries in
INVESTING seem a bit brief. However, I will happily share some generic advice
that may, or may not (but probably will) relate to your circumstances.  I would
also suggest that you read both of Peter Lynch's books.

First, the latest issue of Kiplingers has a thorough breakdown of Mutual
fund(s) performances.  What's nice about THEIR approach is that they take the
time to explain how and why they rate the funds.  You will be able to see how
you COULD  have invested in any number of funds yielding well over 20% annualy.
Of course, hindsight is 20-20 and if I could have predicted 3 years ago how
well certain funds would have done, I would have averaged over 40%/year!!!  I
gave up, years ago, regretting my lack of foresight. :-)  My goal is, and has
been for quite a while, to consistently beat the S&P 500.

Money is made in two ways, here.  First, like a poker game where all players
have a pair and all bluff as if they held straights, the amount of dollars in
the pot increase, but with no increase in underlying value.  That is what
happened mid-1980's.  In Oct. 1987, someone "called" and all players found out
that what they held was worth a whole lot less than they thought.  Until the
hand was called, many people made money buying and selling on inflated values.

The other way money is made in the stock market is by buying quality vehicles 
at low prices and selling at higher prices.  That means you need to know how to
recognize a quality investment and you need to understand timing.

What I try to do in selecting investment vehicles - and I DO NOT always call
them correctly - is to take a long term approach in evaluating each vehicle and
then monitor it as if it were a short term investment.  In that way, although I
have picked a buy_and_hold fund, I constantly keep abreast of how well the fund
meets its objectives and how well those objectives fit the current market.  In
that way, I maintain an informed position and am able to intelligently change
funds when appropriate.  

Timing is, of course, a big variable.  You have to know when to hold 'em and
know when to fold 'em. Explaining the art/science of timing - and why nobody
should do it :-) - would take a book.  But it starts with a thorough
understanding of Macro Economics and ends with an understanding of Human
Nature.

As for the makeup of any one particular portfolio, although it requires a well
thought out approach - know what your finances are, where you want to take them
and how much risk you are willing to accept - the key word is, in my
seldom_very_humble_opinion, diversification.  I think that if you picked up the
Kiplingers Mutual Fund summary of 3 years ago, selected a diversified portfolio
of the half/dozen or so funds that they rated "A A" or "B B", and then look at
THIS month's issue, you would see how even that "no brainer" would have done
MUCH better than the S&P 500.
++++++++++++++++++++++++

Let me throw  in a comment about timing - and I do this with great trepidation
since market timers are at  GREAT  RISK, in general.  That risk can be reduced
to an acceptable level, but ROI  suffers.   Although when it comes to investing
I AM a "market timer" and much of my ROI achievements are the  result of timing
and  I  will  BRIEFLY explain how I look at markets vis-a-vis timing, I would
NEVER recommend that anyone do this.  I am comfortable with the understanding
that,  from  time to time, I WILL LOSE MONEY; I NEVER lose any sleep when that
happens. 

Since we are in a EE environment, I explain the market this way;  try to
visualize a high frequency saw tooth that has as its base line a low frequency
sine wave that has as ITS base line a VERY low frequency  sine  wave.  The saw
tooth  is the weekly market fluctuations;  the low frequency sine wave is  the
US (or any area of your choice) economy;    the  very  low  frequency  sine
wave  is  the  global economy. Understanding the global,  very low  frequency
wave requires  an understanding of Macro Economics.  Understanding the Area low
frequency wave requires an understanding of Micro Economics.  Understanding the
Saw tooth wave really requires an understanding of Human Behavior (Market
Psychology). 

An informed investor will recognize when the global market has started down
and will pay closer attention to the area market; shuffle $$$ around to those
area markets that are still going up.  When the area markets start down as
well, the only "buy low, sell high" game in town is to try to time the
Sawtooth.  Good luck, God bless, and please let me know how you did it. :-)

That is, don't try to time the peaks; buy in just after the market has started 
up and sell out just after it has started down.

An arguement can be made that the global sine wave has started to move upwards;
truely Global funds are continuing to do well, albeit not up to the S&P.
Clearly, the US sine wave is on an upswing, although the frequency of THIS wave
is really low since our whole economy is undergoing a paridgm (ugh) shift.  The
Sawtooth - we saw the trailing edge drop off this week. After all, "everybody"
said there was going to be a post-labor day correction - and there was.  Ain't
that amazing?  Something about self-fulfilling prophesies. 

Bottom line, I AM NOT a speculator; I am a very conservative planner of
finances. I invest in the stock market ONLY because it is one way to meet my
financial goals. I am not particularly interested in  providing "investment
advice" (this reply stretches my limits); I provide financial advice that
encompasses ALL of a person/family's finances.  I am not so arrogant as to
believe that MY good ideas are the best ideas.  What works for me is what works
for me.  If it works for you, great!! If not, great. 

And one caveat, I am beginning to suspect that we may in that poker game where
we are holding a pair and betting up the pot just because banks are offering
low interest rates. In this game, the winner is not the one who has the best
hand, but the one who gets out just before the hand is called (I, as others,
MISSED that one in Oct. 1987).  The REAL question is, "DO I want to just change
tables, or leave the casino?" 

I hope this has been of some value. In light of the second paragraph, I think
any more than this might be contrary to this conference's objectives; please
contact me off line, if you like. 

Always, For What It's Worth.

Dave

    
    re: last few
    
    Scudder International and T. Rowe Price International Stock have 
    also jumped in the last 6 months/year. They are up about 25% YTD, 
    and 30% for the last 12 months. Looking at a chart of foreign markets
    in the Forbes mutual fund issue, it looks like international funds stayed
    flat for the two years preceding this runup. If one was in the market 
    from mid 1990 to mid-1992, you could be very sour on international 
    stocks/funds because your money would have really grown in U.S. equities. 
    
    
    doug
     
    
      

    
    BTW,
    
    Does anyone know a good source for historical market index information
    on individual foreign markets?
    
    
    doug
    

    re. .23
    
    Wow, what an answer.
    
    My take on why the analyst are suggesting international markets for
    investment (as I understand it):
    
    With interest rates dropping in Europe (ie. Germany) for the first time
    in some time (they have been lagging the US Interest rates in this
    regard) and the economies over there depressed for two years, that 
    long European economic sinusoidal wave has dipped, and been dipping for 
    some time. Time to get in before it heads up. In other words, they are due
    for a rally (that the bond rally will fuel). 
    
    However, on the converse it seems, that the European economy has more 
    fundamental problems and so the rally could never materialize. ie 
    re-Unification of Germany, etc. So the rally could be delayed for who 
    knows how long. 
    
    re. .25
    
    Good question. Since I am a novice investor, with limited time, it
    would be nice to have a publication that keeps me more updated on
    International markets.
    
    I have a sample copy of Mutual Fund Forecaster and it has a somewhat
    limited section on World Funds. Anyone have recommendations on a better
    publication?
    
    Curt
    

re timing

Last week offered yet another example of the "sawtooth" on the sine wave.  When 
Yeltzin and the Russian Parliment declared each other null_and_void, the market 
fell faster than a pickpocket's fingers in a crowded subway car.  This actually 
happens quite a lot.  From a timing perspective, THIS was the time to move 
money from cash into vehicles based on growth that have a normally high beta.

Predictably, the market recovered since the underlying values had not changed.

Unfortunately, when I tried to pop in here and offer a timing_buy_suggestion,
the conference was Dead_On_Access.  Too bad, since the window of opportunity
lasted but 2 days. I wonder how many others took advantage?

Of course, there COULD have been shooting and the market COULD have continued
down after I bought, but then, that's why Market Timing requires nerve.  Or, 
perhaps, Market Timers are just not bright enough to know how much we are 
risking.

This also offers some explanation as to why I am hesitant to get back into 
Internationals, just yet.  Bananna Republics offer GREAT earnings potential, 
but at GREAT risk.  It is difficult enough for me to wrestle with macro 
economic forces influencing business conditions; when you throw in unstable
political environments, my brain begins to ache. 


As Always, For What It's Worth.....

Dave

	DJIA is up another 35-40 points to cross 3700 for the first time!

	So much for the gloom and doom in Sept/October stories :-)

at 12:40pm

DJIA +37.00 3701.55 on 165M shares
SP500 +3.75
NASDQ +4.75
AMEX  +2.67

/mtb

Latest quote says the Dow is at 3982.58, +37.43 (DEC, of course, is down).
Do you think we'll see 4000 by weeks end?

    Yes, it won't be long now.  New highs makes headlines.  Headlines
    create interest.  Interest brings in new money to the market
    and the upward spiral continues....
    
    Gessh, even a 500 point loss from 4000, puts the DOW at 3500.  It
    just won't seem like a 'crash' if that happens.

>     Yes, it won't be long now.  New highs makes headlines.  Headlines
>     create interest.  Interest brings in new money to the market
>     and the upward spiral continues....

	But speaking of interest, the Fed said yesterday it will
	be raising rates.  When and how much is unknown .....

	Could the market be voting with its feet on how it really feels 
about the results of the election?

    It could be a combination of things.  I don't think the election
    has much to do with it.

    It is tax selling season. Interest rates are rising which is bad
    for stocks since investors can sell stocks and buy bonds for a
    higher return.  Even so, bond owners are selling bonds they own
    whose value has dropped and buying other bonds so that they can
    take a tax loss on their return. Even though earnings have
    improved significantly in the last quarter or so, stock PE
    ratios are at historically high levels, not to mention price to
    book.  A lot of investors and traders are a bit skittish these
    days. If they see a downturn in stocks, they'll sell.

    If the mutual fund investors decide it is time to get out, then
    you'll really see a drop and I suspect that has a chance of
    happening.  One reason the market valuation is so high now is
    due to the steady contributions to mutual funds.  There's a lot
    of money from 401K, IRA, SEP-IRA, and 403B(?) programs feeding
    the mutual funds.  However, in the last few months those
    contributions have slowed significantly.  Prior to this year,
    these people were used to getting 20% annual returns.  This year
    they are lucky to break even.

    I sold almost all of my equity funds near the peak several weeks
    ago.  I wanted to beat the rush and I hate crowds.