Wednesday, June 28, 2006


some midcap it companies which went up in last 10 days on much higher volumes compared to past volumes are..

visual soft

high volumes advance is a good signal..
accumulate on dips.

Tuesday, June 27, 2006

>America Sectoral Indices

Nasdaq BANK

Nasdaq Biotech

Nasdaq Computers

Nasdaq Financials 100

Nasdaq Industrials

Nasdaq Insurance

Nasdaq Telecommunications

Nasdaq Transportation

>Asian Indices
>American Indices
>America Sectoral Indices (for detailed view of sector wise moves)
>European Indices
>Commodity & Currency

>Commodity & Currency

This page has Commodity real time short term charts of (refresh to see live prices)










>Asian Indices
>American Indices
>America Sectoral Indices (for detailed view of sector wise moves)
>European Indices
>Commodity & Currency

>Asian Indices

This page has Asia real time short term charts of (refresh to see live prices)

NSE Index 5 day

Japan 5 day

China 5 day

Australia 5 day

Hang Seng Index 5 day

Jakarta Composite Index 5 day

Kuala Lumpur 5 day

NZX 50 Index 5 day

Straits Times Index 5 day

KOSPI Composite Index 5 day

TSEC weighted index 5 day

>Asian Indices
>American Indices
>America Sectoral Indices (for detailed view of sector wise moves)
>European Indices
>Commodity & Currency

>European Indices

This page has Europe real time short term charts of (refresh to see live prices)FTSE 100 5 day

France 5 day

Germany 5 day

Dow 5 day

Nasdaq 5 day

>Asian Indices>American Indices
>America Sectoral Indices (for detailed view of sector wise moves)
>European Indices>Commodity & Currency

>American Indices

This page has US real time short term charts of (refresh to see live prices)
Nasdaq ShortTerm 40 Days

Dow Joones 40 Days

Nasdaq Long Term

Dow Joones Long Term

Russel 2000

Dow Jones Utlity Average

Dow Jones Transportation Average

Brazil 5 day

Sunday, June 25, 2006

>Weekend Reading

"Money and position management-- waiting for entries (triggers), the use of protective stops, trailing stops, and profit taking--is crucial to your long-term success as a trader. A simple money management system is to take at least half of your profits when they are equal to or exceed your initial risk. You then move you protective stop on your remaining shares to breakeven. This way, barring overnight gaps, you have a "free" position that has the potential to turn into a homerun (through the use of trailing stops)." - Dave Landry

"Believe it can be done. When you believe something can be done, really believe, your mind will find the ways to do it. Believing a solution paves the way to solution." - David J. Schwartz

Jesse Livermore was perhaps the most famous stock trader of the early 20th century; he made and lost millions of dollars in his day. And, for the record, that was a lot of money 100 years ago. Livermore was most famously immortalized in Edwin Lefevre’s thinly veiled biography Reminiscences of a Stock Operator, probably one of the best and most helpful books on trading and investing ever written. One of Livermore's trading rules was “Be right and Sit Tight.” He also said this is one of the hardest lessons for any investor to learn. In other words, Livermore suggested jumping on board a major trend and then having the courage to hold on to make the really big gains.

"A prerequisite of a high level of success is a high level of resilience with respect to loss and defeat." - Brett Steenbarger

"Nothing is impossible; there are ways that lead to everything, and if we had sufficient will we should always have sufficient means. It is often merely for an excuse that we say things are impossible." - Francois De La Rochefoucauld

``Markets know more than you,'' says Jim Rogers, a founding father of the hedge-fund industry.

``The market is right and you are wrong,'' says Yra Harris, who has traded in Chicago's futures pits for almost three decades.

``Markets are very humbling,'' says Sushil Wadhwani, a former Bank of England policy maker who runs his own fund.
Christian Siva-Jothy, the former head of proprietary trading at Goldman Sachs Group Inc., went from making $100 million in 1993 to losing $40 million in a single day in 1994. He lost as much as $200 million when the British pound fell against the yen. ``I was a bit full of myself,'' he says. ``The market found me.''

Humility, it seems, helps top investors to dodge disaster. ``I'm really humble about my ignorance,'' says Jim Leitner of Falcon Management Corp., who estimates he's made more than $2 billion for investors and employers in his trading career.

``Many traders I've met over the years approach the market as if they're smarter than other people. I have found this approach eventually leads to disaster when the market proves them wrong.''

Getting out of losing trades fast, throwing as much money as possible at winning trades and recognizing that you can be right and still lose all your capital are essential tactics. In 1992, for example, George Soros's Quantum Fund made more than $1 billion betting that the peg between the British pound and the currencies of Europe would break.

``Shorting the pound was Stanley Druckenmiller's idea,'' says Scott Bessent, who was then running Soros's London office. ``Soros's contribution was pushing him to take a gigantic position. George used to say `if you're right in a position, you can never be big enough.'''

Knowing when to fold is important. ``However strongly you believe in something and however coherent the case is, you need to be willing to accept that you might be wrong,'' says Wadhwani, the former central banker.

Exit Strategy

``The stop-loss is by far the most important aspect to a trade,'' says John Porter, who runs Barclays Plc's cash positions. By setting a limit on how much money a trade is allowed to lose, ``you'll never blow up.''

As the hedge-fund industry matures, it may be sowing the seeds of its own destruction. Investors are becoming less willing to take big risks to make big money.

``In general, people aren't trying to make money nowadays,'' says Bessent. ``A lot of these guys have huge asset bases, so they're running a business, not a hedge fund. That's what's interesting about Soros. If he was up 20 percent in June, he would try to be up 100 percent by December. Most people today will close out their positions and take the rest of the year off if they're up 10 percent in June, and that's what their investors want them to do.''

``In trading, like golf, it's how you play the bad shots that really matters,'' the trader says.

``Recognizing when you're right is as hard for some people as recognizing when you're wrong. I find it comical to see people cut their profits and run their losses, but it happens all the time.''

He's less than complimentary about books on trading. ``They're all obvious rubbish, full of stupid things that probably don't work anymore.''

>Finding the Edge

IN THE EDUCATION OF an investor, information, arguably more than money, ultimately becomes the decisive factor to successfully navigating the financial markets. This realization often occurs after amassing a meaningful portfolio and an understanding that the market hurts most of the people, most of the time. At this point, investors usually find they're more concerned with not losing the money they've amassed, and they develop an insatiable appetite for insightful information upon which to base investment decisions.

Professional investors call this insight "edge," some special vision into the market's psychological and structural dynamics that gives investment decisions more insight than, say, dollar-averaging positions. This quest for an edge over other investors leads many folks to the options market. Other times, investors collide with the options markets when they experience the shock waves derivatives traders can cause when they are managing positions and buying securities with the intensity of whirling dervishes.

In the mystical world of puts and calls, things are rarely as they appear. Prices can move in opposition to underlying assets, and often do. Bearish activity can be bullish. Volatility ceases to be solely an adjective and morphs into a complicated mathematical model that divines future options prices. While investors can put a little money in options to control lots of stock, they shouldn't look for the astronomical returns hucksters insinuate can be made trading options. The options market is dominated by some of the world's most sophisticated trading firms. These firms rely on computer models to dissect stocks, and all related securities, weighing every nuance of a stock's price to determine what the asset is really worth. Rather than trying to out-trade the experts, most investors should try understanding the information embedded in options trading patterns, which can be more valuable than associated leverage.

The late Harry Roth, who in his time was considered the dean of the options strategists, had a simple rule for succeeding in the options market — the KISS principle, which he defined as Keep It Simple, Sweetheart. For professional traders, and maybe high-net-worth investors, there may be a legitimate need for exotic derivative strategies, like butterflies and volatility trades, but it's not abundantly clear that is true for anyone else. Consider this: Some years ago, a retired Bear Stearns derivatives salesman, who has a doctorate in mathematics, revealed that he often enjoyed spending the day formulating complicated volatility trades, but confessed he wasn't certain he made any more money than if he bought the stock or used a simple strategy like selling calls against a stock. Most investors who are interested in options will be well served remembering Roth's dictum.

What is clear — and this is true for investors of all experience levels — is that the options market is the heartbeat of the stock market. On any given day, the future of stock prices is debated in the options market. Traders buy and sell puts and calls to wager on upside and downside earnings reports. They use S&P 500 index options to protect equity portfolios from market fluctuations. When companies are rumored to be takeover targets, call options can reveal if the market believes the rumor, and, if so, the expected takeover premium. Sometimes options trading patterns are accurate; other times not. That's why many professional options traders consider themselves "contrarians." They express their fundamental view of the market by saying they buy fear and sell confidence. So, if everyone is selling a stock in reaction to news, contrarians buy the stock because they think investors have overreacted. Contrarians often do the opposite of other market participants because their fundamental market stance is to challenge the assumptions behind corporate actions and market events. This is another dictum investors interested in options should remember.

In any year, the stock market has about 225 trading days. Many of those days are scripted, and trading is in response to known events, such as the Federal Reserve's interest-rate meetings, corporate earnings or economic-indicator releases. This type of information is common knowledge among professional traders who try to anticipate events and remove as much uncertainty from investment decisions as possible. If you don't have access to a market calendar, you're at a disadvantage to everyone else who has the information, but that can be easily fixed. The International Securities Exchange distributes a five-day forward trade sheet, ISE Insights, that lists major market events, earnings reports and other critical information. Information about email delivery can be found at

Sentiment indicators are another important tool that reveals how options traders view stocks. Investors should learn about the Chicago Board Options Exchange's Volatility Index (VIX), known as the options market's fear gauge, at, and the ISE Sentiment Index (ISEE). The CBOE has made a number of refinements to the VIX, so spend time understanding those changes because volatility is synonymous with options prices. The VIX can be an early warning signal of market movements. (In the interest of full disclosure, I once worked at ISE and was involved in creating ISE Insights and the ISEE.)

For many investors, the markets are fascinating in their complexity, and majestic in their operation. Each day at 9:30 a.m. when trading starts, a staggering amount of intellectual firepower turns to the financial markets. The securities traded on stock exchanges represent the accomplishments of great scientists, industrialists, technologists — in short, people with the strength of will to turn concepts into companies, the growth of which Wall Street finances with stocks and bonds, which in turn have spawned myriad financial products like options. As a group, the people who work on Wall Street are heroic and villainous, elegant and vulgar, smart and dumb, honest and dishonest. Yet, all of them want the same thing, which is to make as much money as possible. Somewhere, not too far from the maddening crowd, are a handful of traders, in mastery of their emotions, disciplined, insightful, managing positions with precision. This mindset is another insight investors interested in options trading should remember.

For anyone who is curious about the forces percolating around stock prices, information embedded in puts and calls can be invaluable, and the options trading strategies can offer investors unprecedented flexibility coping with stock prices. These strategies may be increasingly important to the long-term health of a stock portfolio as global financial markets are becoming increasingly interdependent and asset-class performance becomes increasingly difficult to differentiate from one another.

"As the markets become more interconnected, many investors would be remiss or negligent if they didn't implement options strategies to navigate the stock market. If there is one lesson that we have all learned these past few years, the market fluctuates," says Michael Schwartz, Oppenheimer & Co.'s chief options strategist.

Schwartz counsels investors to remember that options should be used to reduce risk, not increase risk. "Options are part of your investment tool kit," he says. "

Options can be used to implement the four basic objectives of investing:

  1. buying below the market,

  2. selling above the market,

  3. increasing your return, and

  4. protecting your assets.

All of which can be implemented with conservative options strategies."

And that is exactly what The Contrarian is about.

To closely track Stock and Index {call puts and options traded volumes and oi} check this link.


Friday, June 23, 2006

>Desktop Charts of Gold Silver Platinum Palladium

Download this file from here > InstallKitco and install it u have the charts on ur desktop.

You can refresh every 1 min to 60 mins.

Wednesday, June 21, 2006

>The Right Price

Edited By Jeff Greenblatt June 20, 2006

"Efficient Market Theory states that fundamental analysts are so good at their jobs that all mispriced securities have been identified. The concept of efficient markets is such that prices are determined by expectations of future profits, risk and interest rates. To determine profits one might examine current market conditions, competition, technology, supply/demand, as well as any competitive advantages a particular company may possess. Price efficiency means the current price of any security already reflects all known information (Radcliffe)."

In simple terms, this implies that every factor is already baked into the cake at any given moment. Every one of us learned these concepts in our economics and finance classes back in college.

Friday morning on CNBC well known Wharton school professor Jeremy Siegel questioned EMT after teaching it his entire academic career and actually stated he thinks there are times when prices in the market are actually "wrong." Did you see it? Who am I to question a famous Wharton legend? The time is right. I am challenging at least part of his sudden "insight" and try telling anyone who just made or lost a bundle of money that prices are "wrong."

Mr. Siegel opens an interesting debate. While his assertion that prices are sometimes wrong is DEAD WRONG, he might be on to something. EMT followers also state there is a paradox to the theory because the only way speculators can actually profit from financial markets is when any particular market participant believes he has information that no other participant has and acts on it. The story goes that if he has information nobody else has, markets can't be priced efficiently.

The question becomes, is all information baked into the cake at any given moment or not? This is not an easy question to ponder but to get to the truth we need a new hypothesis.

The first thing we need to realize is the market is ALWAYS RIGHT. There can be no doubt about that. I am surprised anyone in academia could disagree with that. While last month's monster wave may have been overdone, try telling the folks who lost huge chunks of bankroll the market was wrong. The market is right because prices are being driven by something other than static information.

There is no doubt that markets react excessively on the bull and bear side. This is precisely why Mr. Siegel thinks prices are sometimes wrong. However, the work here has shown in every instance in every market that a reversal will take place according to some precise calculation. Every leg has perfect precision whether we can calculate it or not. From that perspective, prices can't be wrong.

What EMT academics miss is not that markets are efficient because all information is reflected in current prices, they miss because prices are a reflection of the human emotional swings from extreme optimism to extreme pessimism and back. This is the one factor they leave out and likely the most important factor of all. While fundamentals don't change much from one day to the next, ITS THE HUMAN PERCEPTION OF THOSE FUNDAMENTALS THAT CHANGES FROM ONE DAY TO THE NEXT.

The truth of the matter is that prices and price movement are not based on all known factors at any given point in time but our emotional reactions to them. Technical analysis is nothing more than a graphic picture of human emotion. Today we hear all about the crowd's concern for inflation. Is the inflation we are experiencing today very different from the inflation we experienced prior to May 11? I think not. What changed? Our perceptions changed. They changed because when the cycles expired, it was like a giant flip of a switch. Markets are ruled by Universal law as exhibited by the golden spiral and interpreted by Fibonacci/Lucas price and time calculations.

Financial markets are not static. They are in constant motion and spiraling in a precision and language all its own which is representative of the hopes, fears and expectations of all market participants which is ALWAYS PERFECT. What we must understand is people are entering and exiting the market all the time. Individuals can effect the market in a minute way. This is why certain patterns don't always work. We may see a head and shoulders pattern in the NASDAQ forming but it doesn't work out simply because the market is not made up with the exact same participants as the last time a head and shoulders confirmed in the NASDAQ or any other chart for that matter. The other consideration is while each individual brings his own fear and greed to the party, once he pulls the trigger he is susceptible to the herding complex which is the madness of crowds. When it comes to financial markets, smart people tend to do dumb things because they see everyone else doing the same thing. Last week the market rallied on good news, today it does not. Why is that? Certainly couldn't be strictly because of the INFORMATION.

Ultimately we are looking at a mass emotional response. Markets are never wrong, only our perceptions are wrong. If we don't understand why a particular wave behaved in a certain way we say it is wrong. It's not wrong, its only we are not sophisticated enough to understand the exact calculation the market is exhibiting to make it right.

You can obviously see there is a lot more going on than a clustering of data. Markets may be efficient, but they need a new paradigm. EMT may have been good for the 20th century, but we aren't in the 20th century anymore. Efficient Market Theory, we may want to rename it EMOTIONAL MARKET THEORY. . Here in the 21st century alternative research is uncovering calculations that are making sense to these markets, finally. Gann was first and 90 years later his work is still on the cutting edge. Emotion rules and we are finally uncovering why the masses behave the way they do. The academic community is going to have to realize the human element in the equation and more importantly, what is driving the human element. They are also going to have to realize that just because they don't understand why the market behaved a certain way, that doesn't make price action wrong. A whole new wave of researchers are proving otherwise.

source: email from Jeff

Thursday, June 15, 2006

>Economy has US$ 500 billion investment potential: Kamal Nath

Economy has US$ 500 billion investment potential: Kamal Nath

New Delhi: India has investment opportunities of around US$ 500 billion in the next five years. Of this, the infrastructure sector alone presents opportunities worth US$ 250 billion, commerce and industry minister Kamal Nath today said.

"The Investment Commission of India estimates investment opportunities of $130 billion in manufacturing in the next five years alone. We expect foreign investors to be major players in this segment," Nath said at the closing session of the India-Japan Business Summit in Tokyo.

The minister invited Japanese enterprises to invest in Indian special economic zones (SEZs). "Though, today there are only 15 SEZ's functional, we expect the number to increase to 150 in the next one to two years in view of the unprecedented policy incentives provided in the scheme," he said.

Opportunities in areas like auto-components and automobiles, drugs and pharmaceuticals, biotechnology, chemicals and petrochemicals, agro and food processing and fashion and textiles, which are registering double-digit growth, are especially noteworthy, Nath said.

# >Service segments log 20-60 per cent growth in FY06

# >India can strike gold with carbon credits

# >Venture capitalists stay bullish on India

~~Also see this.
see this insider trading document
many promoters have purchased heavily. gives good place to start digging.

promoter purchase +
good or normal growth +
low pe +
good profit margin +
low debt (dont go for ones with high debt, if it flops, it can direct go to zero)

== great pick

>Indian Commodity Charts

Click on Links to open in New Window.




Tuesday, June 13, 2006


What is maturity?
Maturity is the ability to control anger and settle differences without violence or destruction. Maturity is patience. It is the willingness to pass up immediate pleasure in favor of the long-term gain. Maturity is perseverance, the ability to sweat out a project or a situation in spite of heavy opposition and discouraging set-backs. Maturity is the capacity to face unpleasantness and frustration,d iscomfort and defeat, without complaint or collapse. Maturity is humility. It is being big enough to say, "I was wrong." And, when right, the mature person need not experience the satisfaction of saying, "I told you so."

Maturity is the ability to make a decision and stand by it. The immature spend theirl ives exploring endless possibilities; then they do nothing.

Maturity means dependability, keeping one's word, coming through in a crisis. The immature are masters of the alibi. They are the confused and the disorganized. Their lives are a maze of broken promises, former friends, unfinished business, and good intentions that somehow never materialize.

Maturity is the art of living in peace with that which we cannot change, the courage to change that whichs hould be changed -- and the wisdom to know the difference.

This post has found place on this site since its a tremendous help in trading/investing.
I think its life changing to read this. Thanks to whoever originally wrote this.
Source: A friend.

Monday, June 12, 2006

>15 common biases that can lead to bad decisions

Decision-Making Biases

1) Availability: Drawing conclusions based only on vivid and recent information.

2) Irretrievability: Failing to think beyond a preconceived notion.

3) Presuming associations: Assuming certain associations exist with no real evidence.

4) Confirmation trap: An unconscious search for supporting evidence that the right decision has been made, while ignoring evidence that a bad decision was made.

Measurement Biases

5) Sample size insensitivity: Reaching a conclusion based on a small sampling of information that does not truly represent the complete situation.

6) Ignoring regression to the mean: Not recognizing that above-or below-average results won't necessarily continue forever.

7) Conjunctive and disjunctive events bias: Mis-estimating the likelihood that certain events will occur when those events must take place for a particular outcome to occur.


8) Insufficient anchor adjustment: Assuming an outcome of an event will be exactly the same as the outcome of a similar prior event without examining differences.

9) Hindsight: Evaluating a judgment after an event has played out and with perfect knowledge of the outcome.

10) Positive illusions: A tendency toward overly optimistic views of things rather than a realistic assessment.

Taking Biases

11) Avoiding uncertainty:
A preference for stability rather than uncertainty.

12) Asymmetry of risk tolerance: Investors are risk-averse with regard to gains (preferring to sell "winners" and ensure the gain) but risk-takers when it comes to losses (preferring to hang on to "losers").

13) Regret avoidance: Investors tend to feel more regret toward committed actions that have turned out badly rather than omissions that could have turned out favorably.

14) Internal escalation of commitment: The tendency of an investor to increase the support of their initial decision over time.

15) Competitive escalation: The tendency of some investors to view competitors' actions or other investors' collective actions as validating an investment idea.

Recognizing these biases is important. I'm sure if you think about some of the bad trades and investments you've made in the past year, you're likely to discover one of the biases affected your judgment. At least I know I can.

Bottom line - by understanding that these biases exist in your own decision making process will ultimately help you control and overcome them. Print out this list and keep it somewhere so when you take time to analyze your past trades you'll know what to look for.

>Bear market musings

Betting on the Market


Here are the pros' analyses of bear markets and whether there's the  chance of one in the not-so-distant future.  These comments are drawn from the full FRONTLINE interviews.

You can also click on the person's name for the full interview.

Peter Lynch

He ran Fidelity's Magellan Fund for thirteen years (1977-1990). In that period, Magellan was up over 2700%.

"The market itself is very volatile. In the 95 years so far, we've had 53 declines in the market of 10 percent or more......That's once every two years. Of the 53, 15 of the 53 have been 25% or more. That's a bear market.

So 15 in 95 years--about once every six years you're going to have a big decline. Now no one seems to know when there are gonna happen. At least if they know about 'em, they're not telling anybody about 'em. I don't remember anybody predicting the market right more than once, and they predict a lot. So they're gonna happen. If you're in the market, you have to know there's going to be declines. And they're going to cap and every couple of years you're going to get a 10 percent correction. That's a euphemism for losing a lot of money rapidly. That's what a "correction" is called. And a bear market is 20-25-30 percent decline. They're gonna happen. When they're gonna start, no one knows. If you're not ready for that, you shouldn't be in the stock market.

I mean stomach is the key organ here. It's not the brain. Do you have the stomach for these kind of declines? And what's your timing like? Is your horizon one year? Is your horizon ten years or 20 years? If you've been lucky enough to save up lots of money and you're about to send one kid to college and your child's starting a year from now, you decide to invest in stocks directly or with a mutual fund with a one-year horizon or a two-year horizon, that's silly. That's just like betting on red or black at the casino. What the market's going to do in one or two years, you don't know. "

Ron Chernow

He is the author of "House of Morgan" a National Book Award winner. He also wrote "The Warburgs," winner of the Eccels Award for best business book.

"Sooner or later we have a sustained bear market. We have not repealed the business cycle. It's unlikely that financial history has turned a corner and that we're in a brand-new world where we will never see manias, panics and crashes again. They've been too much a part of the financial landscape for too many centuries.

And one of the reasons that I worry about the institutionalized complacency in market is that once that complacency is shattered, it will turn to the most unreasoning kind of fear, which is panic. And the panic becomes proportionate to the complacency.

And I think that there are so many people who lived through the 1987 Crash, who now think they know the worst that the stock market has to offer, who are really not psychologically prepared for a market that would go down 30-40 percent over a period of a year or two.

I don't know that we will ever have again this sort of situation we had between the 1929 and 1932, because earlier in the century the little people would enter the stock market in a very sporadic and opportunistic way. They would run in late in rallies when there was a certain amount of euphoria. They would then get burned. They would then run out of the market again.

We now have a breadth and depth of involvement of the small investor that is unprecedented when you have 50 million people buying stocks and mutual funds. That's a tremendous base for the stock market. Also even if we had a very violent crash, we'd have a situation now where a lot of stock investment through 401K plans and other retirement plans that are actually written into employment contracts. They're part of collective bargaining agreements. No matter how frightened or disillusioned people became, these systems would continue to go on. And so it's an institutionalized involvement of individuals.

....... One other thing....what would happen if we had a sustained bear market after a lot of the Baby Boomers had retired, they were all past 59, they were beginning to draw from these different retirement plans that were invested in the stock market, and yet suddenly their stocks were under water, on paper their investments were down 30-40-50 percent. What would they do?

They would face two options, to my mind, fraught with peril. They could either decide that they would tighten their belts and ride out the storm and reduce their discretionary spending, which would tremendously intensify and prolong any recession. Or they could say, "Well, we have to cash in the stocks because we need the money to live on," in which case they would suffer a permanent, perhaps quite devastating, decrease in their retirement funds. We really haven't had very much experience with people funding their retirement out of the stock market, and we don't know, frankly, how it would work under every scenario. And, frankly, I don't see that there are a lot of people who are studying that are even speculating about it."

Diana Henriques

She is the author of "Fidelity's World."

"People have been trained over most of their adult saving life, if you look at people now nearing their 50s, to believe that while markets may have a few scary roller-coaster days, by and large, they go up. They don't always. Japan has had a terrible bear market extending five or six years. The U.S. had a terrible bear market all through the '70s. But that's been forgotten. There's a certain amnesia that cloaks the -- the failure of our myths, and in this case one of the great myths is that you can have safety and high return. We haven't wrestled with the idea that high returns require taking higher risks. And that's the big flaw in our psychology.

.....Most people think of the Crash of 1987 as about the worst thing that can happen to the modern stock market, but in fact it really wasn't, not by a long shot. It was a quick, sharp correction, a down draft. The most serious problems it posed were to the mechanical, machinery of the stock market, just coping with the volume of trades, keeping investors informed.

The worse case scenario for the stock market is something like the 1970s, just a long, grinding bear market that edges up and slides back down, two steps forward, three steps back for years and years and years. That's what happened in the '70s. It's what Japan has been living through for the past half-dozen years. It can happen here. There is no immunization of the American stock market that keeps up from ever having a long, dull, grinding bear market. It could happen again. "

Jim Cramer

Cramer manages a hedge fund and is a financial columnist for magazines such as New York and Smart Money.

"I don't think the market is so dangerous. In 1990 we had a full-scale bear market in the financial stocks. You had Citicorp, Chase, Chemical Bank losing 70-80 percent of their value. That was a sector that was decimated. In 1990-4 you had foreign country funds decimated. In each case there were speculators betting that Chase had the stock going down, didn't realize the dimension of real estate problems. There were speculators saying that the foreign stocks had the stock going down. They were all wrong. Those classes of assets were dangerous at the time and they became great bargains. What I'm saying is that there are stocks right now that if you're shrewd enough, you will be able to buy them at the opening today and I you'll make money in a year from now.

frontline: But don't you have to be a professional to be that shrewd?

Cramer: I think that there are changes that have occurred in technology .... people can have the same level of information that I have.....the danger that we have right now are people who get the same information as I do and, therefore, think they'll reach the same conclusions that haven't traded as long, don't have bear claws up and down their backs like I do. I mean I've lost tremendous amounts of money in various markets and I think that's something that makes you better at my job, not worse.

I think a lot of the people who are in now haven't lost tremendous amounts of money yet, don't want to, but will. But they won't lose 'em if they're in companies that are real."

Bill Fleckenstein

Fleckenstein is President of Fleckenstein Capital Management in Seattle and is skeptical about the heights of the current bull market

"I believe a bear market is inevitable at some point, simply because in Nature, in life, in everything, there are cycles. There's no such thing as the elevator that only goes up, which is what the stock market is in people's minds' now. The consequence of it going up in changing people's behavior and pushing prices to where they are and all this is almost inevitably you have a bust. Similarly, when you have a bust, you set up the next boom. So these cycles occur for reasons. You sow the seeds of the next problem. I think it is inconceivable......we will have a monstrous set-back in the stock market. I don't know whether it's gonna come from 6000 on the Dow, 8000 or 10,000."

Jordan Goodman

He is on the staff of Money Magazine and often is asked to appear as a personal finance expert on radio and tv programs.

"........if we get a bear market, it's probably not going to be the kind of bear market we had before, which was very quick, sudden, and it's over. It's probably going to be a longer term bear market like in 1973 and '74. It lasted a long time and stocks were down 50 and 60 percent. That is much more difficult for people to deal with in a certain way than a sharp crash kind of situation and it's over with before they even have a chance to do anything about it.

So we'll have to see if people hang in there through a long-term bear market, which is a little bit harder to deal with. But I think in the long run they will do that as long, again, as alternatives are not very attractive.

...People do have high expectations and you can see it in the kind of cash flows into mutual funds. The money is going where it's been hottest -- technology funds. They see these records, 50-60 percent in the last year or so, and they want to jump in.

....There's a fund recently....I think in the last year it was up about 90 percent. They just opened an emerging growth, an even more aggressive fund for one day and brought in a hundred-million dollars in one day and closed that fund. A lot of people would have wanted to get into it, they couldn't even get into it. They didn't even know it was happening. That's the kind of money that's chasing the hot action right now.

Now probably you'll do well long term in a fund like that, but if there's a bear market or the market gets hit, for whatever reason, short term, I'm worried that people could want to bail out of it. They shouldn't, but they might be people with these high expectations that get dashed and they freak out the moment something goes wrong. "

Jim Jubak

He is the Senior Editor of Worth Magazine and author of "The Worth Guide to Electronic Investing."

"I was talking to Hugh Johnson, who's the market analyst for First Albany......What Johnson talked about and what interests me is that investors always fight the last war. It's like the French before World War II. You build the Maginot line to defend against World War I and the Germans then sweep around your flank. I think investors who have been in this market for any length of time think that 1987 is a typical bear market and it's really not. It went down in a very few days. People basically had no chance to get out. So they really didn't have a chance to do the wrong thing. I think people are behaving as if that's what they how to really worry about so that basically you have a kind of history that reinforces the buy-and-hold mentalitythat worked in 1987.

If what we're talking about, however, is a bear market like '73-74 where you had this grinding decline over months, with the market constantly looking like it was going to rally,the bear trap, as it's called, so that people had a chance to go, "Well, gee, it's down 20 percent, but it's come up in the last few days. I'll put more money into it---it went up just enough for them to get more money sucked in and then went down again. That kind of market absolutely no one is prepared for. There really isn't anybody on the individual investor level who's been through that experience. It's too long ago.

And the last is just a question of what does a 10-1/2% return, on average, really mean to an investor. You don't care about "on average." You care about what the returns have been during the period you're in the market. If the market is going to yield 10-1/2% on average for all the years until the year when you need to get out, -- the 10-1/2 % becomes irrelevant. If you then suffer through a 30% correction, crash, bear market---whatever you want to call it-- the 10-1/2% is a nice statistical abstraction. It doesn't really mean very much for people trying to retire."

James Grant

Grant is founder and editor of "Grant's Interest Rate Observer" and author of "The Trouble With Prosperity ." He 's a well-known Grinch about Wall Street today.

"To have been bearish in the face of this titanic rise in stock price is a little bit like, you know, being bearish on a hurricane. You're going to stand out there and decry the force of Nature, but it's hard to make much headway against it. It has been a truly humbling experience.....the market continues to fly in the face of every single received rule, evaluation and prudential investing that I know.'s a truism, though, that when the market turns down, the worthy as well as the unworthy get taken out... Similarly in the rise, many unworthy stocks get carried along with the up side, but it is not true that the great solid blue chips are exempt what happens to the rest of the list during a sell-off. In the bottom of the last really powerful bear market we had in 1974, you could buy Boeing for less than the value of the cash on its balance sheet, if memory serves.

.......It is impossible to exaggerate the degree of revulsion that the public feels towards common stocks at the end of a powerful, epochal bull market. That is the term of art, by the way. It's called revulsion. It's not bearishness. People just can't stand the sight or the sound of it because there's been so much money much energy expended. There's been so much hope destroyed. And that is called an opportunity. This is where great fortunes are made. So....there is a lot to be said for a bear market. It clears away the debris of a preceding boom. It puts paid to a lot of mistakes and it gives people a chance to buy great companies cheap.

frontline: If stocks have become overvalued and people know it, why do people buy them?

Grant: Well, overvaluation never stops a bull market, nor does undervaluation stop a bear market. In other words, at the bottom of this market, and no doubt one day we'll have a bottom. And at that bottom, people refuse to consider buying a stock that is really being given away. That's the definition of a major bottom of the stock market. Similarly, at the top, people pay no heed to what, objectively, is unprecedented or at least extreme levels of overvaluation. Why? Because they know it'll go higher. At the bottom, they know it will go lower. These truths are absolutely the only certain thing in finance. Everything else about finance is variable and contingent. The only permanent truth in finance is that people will get bullish at the top and get bearish at the bottom.

.... Peter Lynch's great idea is that stock price appreciate over time, but there is no one single settled truth in finance except for the fact that people will over-do it. They will get too bullish and then too bearish. ..It is simply not true that stock prices always follow earnings. If it were as easy as that, everyone would be even richer that Peter Lynch has implicitly promised they can become."

~~ taken from email. thanks.