From: markh@sag4.ssl.berkeley.edu (Mark Hurwitz)
Newsgroups: misc.invest
Subject: A New Theory for Ups and Downs in the Marketplace
Date: 5 Jan 1993 20:31:19 GMT
Organization: Space Science Labs
Distribution: usa
NNTP-Posting-Host: sag4.ssl.berkeley.edu


Hello All-

	I would like to take this opportunity to point out a novel theory
which explains changes in the price of specific stocks, the market in general,
European equities, and real estate.

	If I buy it, it goes down.
	If I don't or can't buy it, it goes up.

	The general boom of the 1980s was triggered by my decision, in early 
1982, to attend graduate school rather than enter the work force.  By 
consigning myself to earning an income on which it was impossible to save
or invest any significant amount of money, equity prices were permitted to
soar to unprecedented levels.  Real estate in general, and California in
particular (because I chose to live here yet was unable to buy a home), also 
rose dramatically.

	The late-1991 stock market rally occurred because I finally threatened 
to begin investing.  When I actually put a little money into stocks and mutual 
funds in early 1992, the DJIA immediately flattened out and began a gradual 
decline.

	In late summer 1992, on the advice of several newspaper articles 
and Money magazine, I invested a little money in a European stock fund.
This action caused the fund to fall by 10% within a few months.  On the advice
of the host of a radio call-in financial program, I cut my losses and decided 
to sell.  Liberated from the onus of my ownership, the fund immediately
began to rise and has since recovered much of its lost ground.

	The stock market rally in Oct - Dec 1992 was precipitated by
my decision in late September to sell many of the equities I had purchased
earlier in the year, on the grounds that the market had been going nowhere,
and that the doom-and-gloom forecasts were getting ever louder.

	In late 1992, I re-entered the market via a Morningstar 5-star
growth fund which had been recommended (twice) in a newsletter to which I 
subscribe.  As my check traveled through the U.S. mail, the share price rose
at a frenzied pace, gaining a full 1% in a 1 week period, and reaching an
all-time high just in time for my purchase.  Naturally, the fund has since 
dropped by 2%, and the most recent newsletter now contains a "Fund Alert" 
urging investors not to put any additional money into this fund.
	
	This behavior is echoed in the performance of several individual
stocks.  I need not bore you with the details.

	About the only thing I have done which has not lost me money is to
invest in a popular income + growth fund managed by Vanguard.  I am certain
that by mentioning this in a public forum, interest rates will begin their 
inexorable rise, and drag down the value of these shares as well.

	The astute reader will no doubt wish to know what I plan to invest
in next, so that appropriate short-selling can begin.  Well, what with 
Germany finally threatening to lower its interest rates, I may decide it's
time to get back into the European equity market.  I predict a short, steep
rally, which will cease immediately after I "buy in," and be followed by a 
long and significant decline.  Also, I am seriously considering purchasing
real estate in the Pacific Northwest, which will undoubtedly lead to a 
ferocious "buyer's market," lasting until such time as I sell the property.

	Perhaps I should start my own news letter....

-Mark
Newsgroups: misc.invest,misc.taxes