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Guy:
Thanks again for your measured thoughts.
Lionel
-----Original Message-----
From: Guy Tann <grtann@xxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Cc: Lionel Issen <Lionel.Issen[lissen@xxxxxxxxxxxxxxxx]>
Date: Saturday, August 15, 1998 7:34 PM
Subject: RE: Preparing for the worst??
>Lionel
>
>I'm just starting to organize my thoughts about this scenario.
>
>With the 'world wide' economy, everything is so intertwined that my
thoughts
>are as soon as Europe starts to fall, we will be on the slippery slope
right
>behind them.
>
>One of the things we've done, as a country, is to cannibalize our
>manufacturing capabilities and locate them off shore, so that even a
>beginning recovery will not help us until later in the cycle. We're
>primarily a service and hi-tech economy, IMHO. That includes finance,
>information, electronics, etc. I have varying thoughts about what
>industries would be the next 'generation' oil and automotive companies.
>
>Here are some of my thoughts, FWIW.
>
>First, you have those industries that concentrate in entertainment, news
and
>information, sports and other escapist outlooks. Granted the economics
will
>change greatly in sports, etc. This might even bring the TV networks back
>to life.
>
>Next, you have those industries that support rebuilding, repairing and
>otherwise fixing things because people won't be able to afford new. So,
>instead of Republic Industries (or whatever that's called) being the play,
>you would buy stock in that other company from Virginia that's building a
>network of used cars dealerships with some supplemental new car dealerships
>added in. Just the opposite of Republic's business model.
>
>We do have a significant advantage over the rest of the world, in so far as
>we already went through our downsizing and restructuring here, while they
>haven't. They've been hiding behind cheap labor and low interest rates to
>cover their inefficiencies in organization and management. We also bit the
>big one when we set up the Resolution Trust Corp. to get rid of all the bad
>real estate loans. Japan and the rest of Asia hasn't even begun to address
>their real estate problems. I'm hoping that since we've already done a lot
>of the social restructuring here, we'll miss a lot of the upheaval that
will
>impact the rest of the world.
>
>With regard to the economic safety net, I'm not sure I agree with you,
>having seen our Government in action over the years. We have wasted
>trillions of dollars during the last 40 years and are in worse shape than
>when we started, IMHO. At least when it comes to education, healthcare,
>family values, etc. We're currently seeing the systematic destruction of
>the medical industry in our country under Clinton. Ever since they were
>unable to get their socialized medicine plan through, they have undermined
>the entire fabric of medicine in this country. In the San Fernando Valley,
>in LA, only one hospital is profitable. The remainder are all losing
money.
>In LA there are probably not 2 hospitals making money. A couple of our
>famous ones are so mismanaged that the only way they stay in the black,
>after their 1,200 staff downsizing, is to live off their endowment. Don't
>want to get into that, but we're seeing the development of a two tier
>medical system. Private pay and the rest.
>
>Regards
>
>Guy
>
>
>-----Original Message-----
>From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
>On Behalf Of Lionel Issen
>Sent: Friday, August 14, 1998 3:33 PM
>To: metastock@xxxxxxxxxxxxx
>Cc: Guy Tann
>Subject: Re: Preparing for the worst??
>
>Guy:
>
>I think that your posting is timely.
>
>It took 20 years, from 1929 to 1949, before the Dow-Jones Industrials reach
>the same level as in 1929.
>
>In past periods like this, people would put their money into government
>bonds, gold and producing gold mines. BUT gold is way down, and unlike
>1929, interest rates are also way down. In 1929 the brokers interest rate
>was, I think, 20%, so that putting money into government bonds, which paid
a
>bit less than this, made sense.
>
>In the 1930's, I've been told that the only industries that expanded were
>oil and aircraft. What would be the equivalent ones today?
>
>In the 1930's municipal and county governments confiscated houses when the
>owners couldn't pay the taxes. At that time, mortgages were callable (they
>were actually either 30 days or 6 month renewable mortgages) so that
>mortgage banks got a lot of property for next to nothing ( yes I know that
>many mortgage banks also went bust). Similar things could happen nowadays
>because the Republicans have largely dismantled the welfare system and the
>banks have very much the same unregulated powers that they had then.
Please
>note, I am not advocating a welfare state, but our industrial society is
>very fragile and the so-called safety net is almost non-existant. What
>should we and our governments do to ameliorate the kinds of conditions that
>could/would develop here in world wide depression? Here in Texas, many
>people suffered enormously in the 1980's oil crunch. Some people have not
>been able to recover even now.
>
>Any ideas?
>
>Lionel
>-----Original Message-----
>From: Guy Tann <grtann@xxxxxxxxxxx>
>To: Metastock <metastock@xxxxxxxxxxxxx>
>Date: Friday, August 14, 1998 5:03 PM
>Subject: Preparing for the worst??
>
>
>>I wrote something about this the other night, but can't find a record of
>>sending it or of receiving it back from the group. Probably sent it on to
>a
>>XXX site somewhere :) ,
>>
>>Anyway, with the 'depression' in Asia, the near collapse of the Russian
>>market and the potential collapse in Europe, I wonder if anyone here in
the
>>group has done any experimenting with various indicators that appear to
>work
>>better in a bear or depression type market???
>>
>>I got the following missive from my dad last week, FWIW:
>>
>>"HI
>>
>> DOW DOWN 250 RECOVER TO CLOSE AT 112
>>
>> Asia in DEPRESSION wait for EUROPE to confirm if when they are hit the
>>WORLD will
>> also be in depression Could last several years I sincerly hope not
>> Socialism will triumph
>>
>>LOVE DAD"
>>
>>I realized that it's been 20 or 30 years since I've had to deal with this
>>type of market. It's hard to imagine making a living when the equity
>market
>>might move just 2% the entire year.
>>
>>So I pose the above question as something we might want to discuss. Not
>>only which indicators might work best, but what vehicles would be best for
>>investing, such as equities (type of industry that best weathers this type
>>of downturn), options, futures (metals, food stuff, etc.), and whatever
>else
>>there may be.
>>
>>Indicators don't look promising. In additional, my latest issue of Road
>and
>>Track has more $200,000+ sedans in it than were being built in the
>1920-1930
>>era. Look how many of those survived, other than in collections. Look at
>>housing! We visited my folks and my wife's family in March. I expect
>>ridiculous prices here in California, but Toledo, OH for gosh sakes :) !!!
>>There were several areas with houses from $500k to over $1mm. Granted you
>>get more there than we do here in California, but come on, let's be
>>realistic.
>>
>>Do we take our housing profits and sit on the sideline for a couple of
>years
>>and rent? It's hard to believe that my house will appreciate much more in
>>value than it has. Our median prices are up over 25% from March, 97 to
>>March, 98.
>>
>>Anyway, I need to start thinking about a defensive posture in trading.
>Most
>>of our stuff is short term anyway, so our basic trading strategy won't
>>change, other than building in a negative bias similar to the positive
bias
>>we built in for this long bull move. I'd like to look at some long term
>>ideas. With the market still up there, we should be able to take some
>>longer term defensive positions without a lot of risk as a hedge against a
>>multi year stagnation (you'll notice I don't use the word depression?).
>>Granted, we can short 'stuff', buy OEX Puts (longer term) on recoveries,
>>etc. I would still like to think we will get another run up which will
>>enable me to take some reasonably priced Put positions, but I haven't seen
>>the impetus for the run up.
>>
>>Any thoughts would be appreciated...
>>
>>Guy
>>
>>
>
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