Great article on "market-timing" and the Greenie-watch

By Duru

November 3, 2001

An article for those of you interested in some market mechanics....

Something the buy-and-holders never tell us: the secular bear market of 1966-1982 where the Dow started off at 995 and ended at 777!!!

This article points out how much our gains, and losses, are determined by JUST the 5 best/worst days of the cycle. There is money to be made during secular bear markets, such as the one we may have embarked upon, but you have to be nimble (brave?) enough to buy at times when negativity is at an extreme (think Sept 21) and then to get out once everyone is falling in love with stocks again (such as now).

And a quick blurb on Greenspan as the Fed revs up for yet another rate cut on Nov 6. Let's watch to see whether the Fed officially recognizes we are now in recession. Let's see whether Greenspan at last admits that it is impossible to lead an economy from boom to a "soft-landing." Let's see if the Fed has ANY soothing, realistic, and truly recuperative words or guidance for the thousands upon thousands of people who continue to lose jobs because the Fed thought it could soft-land the economy. Let's hope that the Fed does not pin the economy's problems mainly on Sept 11th and its aftermath. Finally, let's see whether the Fed officially recognizes it has no idea, and truly can never accurately forecast, when, how, or by how much the economy will rebound (they are just like analysts are prone to be over-optimistic). Anything less, means we can only expect more of the same!!!


From Barron's, 11/3/01

November 5, 2001

Barron's Features

The Truth About Timing

When you're out of the market can be more important than when you're in