-Caveat Lector- from: http://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- US Stocks Bottom Fishing by Alan Abelson Now, that's the proper way to mark an anniversary. Not with a simper but a bang. And we couldn't be more proud of Wall Street. It had every reason to hang out the crepe and fill the neighborhood with keening and lamentation. It had suffered a terrible mauling, and the bears, red in tooth and claw, were rearing up to wreak more havoc. All the ugly things that had spooked investors -- the molten mess in the Middle East, gushing oil prices, a rush of earnings disappointments by the once-charmed techs, an economy starting to evince a bit of a tremor -- if anything seemingly had grown even uglier. And into the bitter brew the calendar tossed a noxious potion: it was 13 years to the day that the market took its worst drubbing ever. Yet rather than slink about shadowed by memories of the terrible crash of '87, brave investors boldly chose to do something absolutely wild: Thumb their noses at fate and stage a rowdy anniversary celebration. And it worked -- boy, did it ever! Nasdaq, which at one miserable moment this month was down nearly 40% from its March high, went ballistic on Thursday, racking up its second-largest percentage gain and the third-biggest point gain for a session in the roughly three decades since the index was created. What a grand sight: Microsoft leading the charge and hard on its heels were most of the old tech gang, having burst out of the intensive care ward, their hospital gowns and IV trollies trailing merrily after them. A visitor from Mars unfamiliar with Street lingo might be forgiven for thinking, as the rally took off in earnest, the giddy crowd had pretty much gotten out of control, filling the air with salacious cries of "bottoms." We'd hate to have the little green man with antennae protruding from his forehead go back to his planet carrying the wrong impression. So if by chance you run into him, spring for a drink and gently explain to him the facts of investment life. Did we get a bottom Wednesday morning when the Dow cratered 435 points and then resolutely clawed its way back, recouping roughly three-quarters of the ground lost and setting the stage for the next day's rocket rise? The answer is unequivocally "yes!" We got a bottom, no question -- at least for the rest of last week. Beyond that, we can offer an equally unequivocal "Who knows?" Although we wouldn't want it to get around, since market strategists are human beings, too, with mouths to feed and big mortgages and the unremitting expense of constantly having to buy a new crystal ball, predicting the market is strictly a mug's game. And this mug's guess is that the lows should hold for a spell, maybe through the end of the year. But we don't think the market has made more than a temporary bottom and a precarious one at that. Understand, we have absolutely no quarrel with the impulse of investors to dump stocks the past couple of months; truth be known, we heartily endorse it. However, they've done a lot of unloading in a short space; indeed, hauling all those shares to the dumpster has made them plumb tuckered out and they plainly need a breather. Mutual funds, moreover, have just about exhausted their ritualistic October selling to establish tax losses to offset gains (yes, Virginia, hard as it is to believe, mutual funds sometimes really do have gains) and the mood hereabouts always lightens when that depressing business is over. However, even when the Dow broke 10,000 on the downside and Nasdaq was flirting with doing the same to 3,000, the market was still flagrantly overvalued and all the more so with the economy losing momentum and earnings estimates way too high. Besides, bear markets don't end and lasting bottoms aren't made when seasoned pros are fully invested and learned analysts still wait for a stock to drop from 60 to 4 before deciding it's not worth buying. If only there were an alchemist in the house who could turn complacency into oil, gasoline would be going for 50 cents a gallon and investors wouldn't need to ask if we'd seen the bottom. What we remember most vividly about the crash of '87 apart from the buckets of blood and gobs of gore (no exaggeration), was the fact that everyone claimed to have seen it coming. Which elicited a wonderful commentary, which we will eternally cherish, written by the incomparable Ben Stein and duly printed in this magazine a fortnight after the catastrophe. "The stock market's collapse of Oct. 19 and its aftermath," wrote Ben, "has left me and my wife the richest persons in the world and we got there without doing a thing! Here's how it happened: "According to various reports, the crash erased about $1 trillion in valuation on U.S. markets alone. But as far as I can tell, my wife and I were the only persons still invested in the stock market anywhere in the world as of Oct. 19. Everyone else, led by Donald Trump and Marvin Davis, had already sold out with huge profits. "Since my wife and I are the only persons in any market, we must own all the stock there is. Which is a minimum of $5 trillion, and possibly as much as $10 trillion." That exquisite joshing riff, which tickles us every time we read it, also says something about the difference between the way things were at the bottom in '87 and the way things are today. Claims of having anticipated the recent market drop are conspicuous by their rarity, primarily, we suspect, because of the overriding belief that it was just a rude interruption to be quickly followed, as interruptions always are, by a brisk new upsurge. We'll know we've finally hit bottom when Ben once again is the only man on the face of the earth who still owns stocks. The rest of the world will have smelled trouble and made tracks long before the perfect storm blew away the stock market. And of course, Ben will be many times richer than the paltry trillionaire he was in '87. Incidentally, we can say with utmost confidence, that won't make him any less the humble, retiring soul he is today. Barron's, October 23, 2000 <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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