Forum Archive Index - April 2000

["hugh webber" <hugh.webber@clear.net.nz>]

I recall betting on one false bottom in 1987 after the Dow didn't slip or 
had small rises 3 days in a row - but away she went and I was punished
severely.
Biggest points fall on the Dow ever? Bit hard to believe - I think it fell
527
on October 20 1987 so that the current fall is probably only about half
that in
percentage terms. But I'm not challenging it to do worse, no way.
My clear recollection is that it crashed then after some really abysmal
monthly US trade figures came out, a deficit of $US17 billion for a
particular
month, this was the precipitating cause. History revisionists I think are
now
putting it down to other factors although these would be initiating causes
not
the precipitating cause and I think the revisionists are getting confused.
It was also interesting that a UK banker was out here and predicted a big
fall a few days before hand but as the adulatory media gathered around him
for interviews he modestly said he had no idea it would be so soon or so
large.
I have come across a few other claims to have predicted 1987 but none of
them
seem to stack up; they didn't publicise and they had other reasons for
selling
such as buying a new house/car.
Well, I suppose the precipitating cause was the unexpected rise in US
inflation
this time.
And like other observers on Sharechat I see no rational reason for the NZSE
to take a pounding on Monday; the P/E's are generally low, good profits
coming
in, the index is nowhere near a historical high and there doesn't seem to
be
any evidence of mad over leveraging in the leading NZ shares as there was
in 1987.
So here's to a test of NZ investors rationality and sanity on Monday which
I hope 
they will pass. What's the point of trying to stupidly outbid each other in
sell at
any price only to see them recover a week or two later.
I'm not a seller anyway, I shall watch with sardonic cynicism to see if NZ
learnt anything
from 1987.

cheers,
hugh




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