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I was just musing to myself, wondering what will I, an informed and rational market follower, do in December 1999.
I know the Y2K thing is overblown and probably won't amount to anything serious. And yet ...
I'll probably take my money out of the bank and liquidate all my stocks for a couple of months JUST TO BE ON THE SAFE SIDE.
And if I'm thinking about doing this, so must millions of other Americans. JUST TO BE ON THE SAFE SIDE. Gentlemen, I do believe we are in for a rout.
Moreover, I got to thinking, well ... how best to trade that scenario. Clearly it will be a good time to short the market or buy puts. Maybe fly to quality by going long the bonds. My God .. maybe I should sell my house and move the family into a trailer. Then again, what about hurricanes!
And then I thought, if that's how I'm thinking about trading the scenario, so must thousands of other speculators and money managers.
In which case, it's usually a good idea to be a contrarian.
So. Come December 1, 1999 I'm going to buy as many S&P calls as I can afford.
But then again ...
>>> "Adrienne C. Hanley" <eeh3@xxxxxxxxxx> 07/14 9:38 PM >>>
The Y2K problem is well laid out in Ed Yardeni's book which is free for the
reading on his homepage:
http://www.yardeni.com/
It is great reading and he keeps it updated. He now predicts that there is a
70% chance of a global recession starting in Janurary 2000, due primarily to
the Y2K problem and lack of attention to it.
http://www.year2000.com/y2karticles.html
is also an informative site on the subject.
Ed Hanley
Bob Fulks wrote:
> At 3:37 PM -0400 7/14/98, BrentinUtahsDixie wrote:
> >
> >Not to over play the Y2K mess but something I read said that because of
> >departmental guidelines and fiscal years, trouble could begin as early as
> >July of this year. The one thing that I don't understand about Y2K is that
> >computers are so much cheaper, more powerful and versatile now. If I were
> >a manager and suspected that I had a bug. I would simply replace those old
> >computers and programing with new. Wouldn't your job be on the line if you
> >had known for years about the problem and didn*t do anything? Something
> >about Y2k just doesn't jive.
>
> The Y2K problem is not primarily with small desktop computers. It is with
> large programs that run on large computers that control everything from air
> traffic control systems to the IRS to power plants and banks. Many of these
> programs were written 20 or 30 years ago and have been modified many time
> since. The programmers who wrote them never imagined that the programs
> would still be in service after so many years so never even considered what
> would happen in 2000.
>
> In addition, there is software (usually called "firmware" because it is
> fixed in a read-only memory) in millions of microprocessors that control
> everything from toasters to VCRs to automobiles. This code cannot be
> changed without changing the microchip which may be soldered into the
> equipment. I have heard that an offshore drilling rig has over 200 such
> processors. No one knows how much of this firmware is Y2K compliant. Some
> of this equipment will just stop working. If it is older equipment, even
> the company who built it may no longer have the original code that they
> built into it so it probably cannot be fixed.
>
> It is all a huge unknown. Could be a minor blip that is gone in a few
> weeks, or could be a disaster.
>
> Bob Fulks
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