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<DIV><FONT color=#000000 size=2>Does anyone use or know how to use
<STRONG><U>Neuroshell Trader</U></STRONG> from Ward
Systems?</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Fri Jun 12 19:43:40 1998
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Date: Fri, 12 Jun 1998 18:18:51 -0400
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From: "Dennis Conn" <dconn@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: MKT - The "Big Picture"
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Hello again all,
I'm not going to include the previous correspondence in this reply - if
you've followed this thread, you won't need it; and if you've been making
liberal use of the delete button, you won't care to see it anyway.
Have you ever noticed that some currently popular ideas tend to get a slow
start after they're first introduced? This applies to several different
things/ideas, from management principles to political ideas, and public
perception of all manner of things. It especially applies to the way people
'feel' about investing in the stock market; for long periods of time, it is
generally perceived to be 'too risky', 'only for those who have money to
burn', etc. You may recall the last prolonged bear market which bracketed
the seventies.
Then, low and behold, a new bull market appears - seemingly (to the general
public) from thin air! Before much time has passed, people are becoming
less pessimistic. After a bit more time has passed, and their viewpoint has
become more positive, the generally accepted belief slowly but surely
becomes one of "you're foolish not to invest for your future - get into a
mutual fund!'
Then, somewhere near the end of the bull, anyone who says anything even
remotely cautionary about the risks involved in speculating near the top is
held up for public scorn and ridicule. At this point, the cycle is complete;
and when the crash happens, those who warned of the possibility are actually
blamed for it!
Now, I'm aware that the ups and downs in a market can all be attributed to
various underlying 'fundamentals', even though I'm beginning to believe that
these 'reasons' are nothing more than after-the-fact rationalizations. I
submit that the only thing driving the current bull market is group
perception of safe and assured profits, fueled by the bullish concensus of
those whose living depends on more investment capital.
BUT, has anyone out there noticed the almost imperceptible (at first) sea
change in opinion occurring? Little by little, bit by bit, justified or
unjustified by the ridiculous P/E ratios or the earnings or their lack, or
WHATEVER is pointed out as a warning sign, the mood is gradually swinging
back towards a more cautious tenor. You see it on CNBC more often these
days, you overhear the conversations about an imminent crash (or, to be
politically correct, correction), and you may even find yourself thinking
about it more often.
The point is that it's nothing but a mood swing on a grand scale, and mood
swings are not rational; all it takes is a significant, although otherwise
meaningless simple correction, and the floodgates will open. No matter what
you may think about buy and hold as a viable strategy, the public lacks the
discipline to hold when they require it the most - and a good correction
will demonstrate this to your satisfaction as they step over the grannies to
rush to pull out before they lose it all; just as they push others out of
the way now to rush in. No justification is required, no rationalization is
necessary, and nothing can prevent it - including the unofficial government
intervention they'll all clamor for.
Then the cycle will begin anew...
Dennis C.
dconn@xxxxxxxxx
P.S. You don't think I'm too bearish, do you?
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