Jonesing for the Dow

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Tue Aug 4 01:30:50 PDT 1998


Dennis R Redmond wrote:


> How now for that Dow cash cow?

Be careful, last time Doug called a top, the DJIA surged another thousand points. But if you're so sure: wanna buy a put?


> And if you're really, really into apocalyptic scenarios, check
> out Steven Roach's article "US: The Great American Bubble"

He's got some interesting things to say; in fact, it's probably the first credible doomsday scenario I've heard from any of the houses on the street: unfortunately, with the bull riding longer than ever, all the bears have been pushed to the sides, so all you hear anymore are equity cheerleaders. But I like the idea that the typical "oh, when the down drops a thousand points we'll just be back to last summer" can get shouted down because *everyone has spent their gains* -- so a 20% correction really puts some of these people in the hole. I think there's a piece missing (namely that consumer credit, including an unknown amount of fraudulent 'home equity loans' [afterall, it's all fungible], can account for at least some of the divergence between income and spending), but it's nice to hear that point of view now and again.

If only he hadn't said it before, two years (and thirty-four hundred djia points) ago.

(for the record, i think we see 10,000 before we see 8,000)

/jordan



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