Go to Jeff Salisbury LWGate Home Page.From: "Rocky Sanghvi" <rs@mylodestar.com>
Subject: RE: [CANSLIM] OT 7
Date: Tue, 29 Oct 2002 20:52:22 -0500
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Eric,
I agree. Good posts - appreciate it.
Rocky
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Eric Jaenike
Sent: Tuesday, October 29, 2002 2:57 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] OT 7
I am less munificent about Greenspan's performance than you, I'm afraid.
I agree that we need to spend time examining the runup in the late 90s,
and to learn from it. Unfortunately, I believe Greenspan played a
central role in that runup through a tremendously expansionary monetary
policy. Those polices appear to be quite similar in effect to the
expansionary policies practiced by the Fed in '24-'27.
There was a tremendous increase in the money supply in '97, '98, and '99
in response to SE Asia, Russia, and Y2K, at the very time the market
should have been allowed to correct. This liquidity, IMHO, generated
extreme malinvestment and the enthusiasm that accompanied that trend.
Since 2000, we have seen a tremendous decrease in interest rates, and a
loose monetary policy. I believe these policies have led to additional
asset inflations, notably in housing, and a levering of corporate and,
especially, consumer balance sheets. I also believe we have seen the end
of that cycle, along with a peak in refinancing activity. Without those
props creating artificial and temporary demand in the consumer sector, I
think we will see a correction in the real economy. Of course, the links
I included explain these ideas much better than I can here.
Perhaps I'm wrong. I certainly hope so, because if I'm not, things will
get quite a bit worse before they get better. Given the trend in
economic data, and, IMO, the quality of this current rally, which to me
seems much more like an oversold bounce than a sustainable run, I
suspect I am not.
And of course, as traders/investors, these ideas serve as background
only. The true tells are all in the market itself.
Eric
Robert Gammon <rgammon51@yahoo.com> wrote:
What stock market investors think about Alan Greenspan in the
short term is very nearly irrelevant to the long term effects of
his stewardship and the opinions of the legions of people who
don't focus their attention on the stock market. His attention
is clearly on what matters in the proper function of his job, the
economy. His goal seems clear, avoid exuberance on EITHER
extreme. More so than most Fed Chairmen, he has managed this
quite well. Granted, this is a cooperative effort, the Fed does
not have all of the tools in its grasp to take total
responsibility for what happens.
Rather than bashing Mr Greenspan, we investors/traders need to
examine what happened in the late 90s stock market runup, and
determine how to properly respond with our investing/trading
strategies when thos conditions reappear. The time periods
differ, bu! t there are similar lessons to be learned in lots of
markets, real estate for example. There is credible evidence
today that suggests we may be near a peak for single family home
construction.
Robert Gammon
Houston, TX
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<p class=3DMsoAutoSig style=3D'margin:0in;margin-bottom:.0001pt'><font =
size=3D3
color=3Dnavy face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:navy'>Eric</span></font><font
color=3Dnavy><span style=3D'color:navy'>,</span></font></p>
<p class=3DMsoAutoSig style=3D'margin:0in;margin-bottom:.0001pt'><font =
size=3D3
color=3Dnavy face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:navy'> </span></font></p>
<p class=3DMsoAutoSig style=3D'margin:0in;margin-bottom:.0001pt'><font =
size=3D3
color=3Dnavy face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:navy'>I
agree. Good posts – appreciate it. </span></font></p>
<p class=3DMsoAutoSig style=3D'margin:0in;margin-bottom:.0001pt'><font =
size=3D3
color=3Dnavy face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:navy'> </span></font></p>
<p class=3DMsoAutoSig style=3D'margin:0in;margin-bottom:.0001pt'><font =
size=3D3
color=3Dnavy face=3D"Times New Roman"><span =
style=3D'font-size:12.0pt;color:navy'>Rocky</span></font></p>
</div>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Eric Jaenike<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Tuesday, October =
29, 2002
2:57 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] OT =
7</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'>I am less munificent about Greenspan's
performance than you, I'm afraid. I agree that we need to spend time =
examining
the runup in the late 90s, and to learn from it. Unfortunately, I =
believe
Greenspan played a central role in that runup through a tremendously =
expansionary
monetary policy. Those polices appear to be quite similar in effect to =
the
expansionary policies practiced by the Fed in '24-'27. =
</span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'>There was a tremendous increase in the money =
supply in
'97, '98, and '99 in response to SE Asia, Russia, and Y2K, at the very =
time the
market should have been allowed to correct. This liquidity, IMHO, =
generated
extreme malinvestment and the enthusiasm that accompanied that trend. =
Since
2000, we have seen a tremendous decrease in interest rates, and a loose
monetary policy. I believe these policies have led to additional asset
inflations, notably in housing, and a levering of corporate and, =
especially,
consumer balance sheets. I also believe we have seen the end of that =
cycle,
along with a peak in refinancing activity. Without those props =
creating
artificial and temporary demand in the consumer sector, I think we will =
see a
correction in the real economy. Of course, the links I included explain =
these
ideas much better than I can here. </span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'>Perhaps I'm wrong. I certainly hope so, =
because if I'm
not, things will get quite a bit worse before they get better. Given the =
trend
in economic data, and, IMO, the quality of this current rally, which to =
me
seems much more like an oversold bounce than a sustainable run, I =
suspect I am
not. </span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'>And of course, as traders/investors, these =
ideas serve
as background only. The true tells are all in the market itself. =
</span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'>Eric </span></font></p>
<p style=3D'margin-left:.5in'><font size=3D3 face=3D"Times New =
Roman"><span
style=3D'font-size:12.0pt'> <b><i><span =
style=3D'font-weight:bold;font-style:
italic'>Robert Gammon <rgammon51@yahoo.com></span></i></b> wrote: =
</span></font></p>
<blockquote style=3D'border:none;border-left:solid #1010FF =
1.5pt;padding:0in 0in 0in 4.0pt;
margin-left:3.75pt;margin-top:5.0pt;margin-bottom:5.0pt'>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>What stock market investors think about Alan =
Greenspan
in the <br>
short term is very nearly irrelevant to the long term effects of <br>
his stewardship and the opinions of the legions of people who <br>
don't focus their attention on the stock market. His attention <br>
is clearly on what matters in the proper function of his job, the <br>
economy. His goal seems clear, avoid exuberance on EITHER <br>
extreme. More so than most Fed Chairmen, he has managed this <br>
quite well. Granted, this is a cooperative effort, the Fed does <br>
not have all of the tools in its grasp to take total <br>
responsibility for what happens.<br>
<br>
Rather than bashing Mr Greenspan, we investors/traders need to <br>
examine what happened in the late 90s stock market runup, and <br>
determine how to properly respond with our investing/trading <br>
strategies when thos conditions reappear. The time periods <br>
differ, bu! t there are similar lessons to be learned in lots of <br>
markets, real estate for example. There is credible evidence <br>
today that suggests we may be near a peak for single family home <br>
construction.<br>
<br>
Robert Gammon<br>
Houston, TX<br>
<br>
<br>
- -<br>
- -To subscribe/unsubscribe, email "majordomo@xmission.com"<br>
- -In the email body, write "subscribe canslim" or<br>
- -"unsubscribe canslim". Do not use quotes in your =
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</blockquote>
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style=3D'font-size:12.0pt'>Do you Yahoo!?<br>
<a =
href=3D"http://rd.yahoo.com/careers/mailsig/*http:/www.hotjobs.com%20">Ho=
tJobs</a>
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