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Contributed by Bill Bonner
Publisher of: The Fleet Street Letter



Today:  Turning The Page

*** Thank God it was Friday...the market rebounded, 
suspiciously and unconvincingly...
*** Abby Cohen is very are most investors.
*** Asian markets down...oil down...dollar 
up...Free speech...heads rolling...and the dangers of 
dihydrogen monoxide.

*** The Bear respected Jehovah's commandment. For six 
consecutive days he labored - dragging down stock after 
stock and mauling them. But on the 7th day, he rested.

*** Abby Joseph Cohen appeared on Friday morning with the 
usual rah-rah act for the New Economy. The S&P will end 
the year 20% higher, she said.

*** Maybe it will, and maybe it won't. But it ended 
Friday higher. The Dow rose 157 points. The Nasdaq shot 
up 241 points, to close almost 8% higher than on 
Thursday. Even so, both the Dow and the Nasdaq ended the 
week lower. The Nasdaq finished off 1.32%. The Dow 
suffered a 3.82% loss.

*** A number of cynical commentators thought they saw 
something underhanded in Friday's market action. John 
Crudele, writing in the NY Post, said on Thursday that 
the Fed would intervene on Friday to prevent panic 
selling. Bill King noted what looked to him like "impact 
trading" on Friday morning - in which large players 
intentionally try to run up prices by buying highly 
leveraged derivatives. He reported strangely "aggressive 
buying...serious buyers do not act this way," he said.

*** Meanwhile, Abby says the market is still 15% under-
valued. And the lumpeninvestoriat seems to agree with 
her. "Individual investors," says the report from the New 
York Times this morning, citing information from AMG 
Data, "continue to pour money into mutual funds at a pace 
even higher than last year's...especially those buying 
aggressive growth companies." More below...

*** Asian markets seemed relieved this morning. Tokyo 
rose 2%. Hong Kong was up 5%. And Ms. Wu, in South Korea, 
must be feeling a bit better; stocks in Seoul rose 7%.

*** The big question, of course, is whether Friday's 
rebound marks a major turnaround...or just another bear 
market bounce. That is the story this week's market will 
tell. But I wouldn't get too excited about a new bull 
phase. Declining stocks have outpaced advancing ones in 
17 of the last 21 sessions. Friday's figures showed a 
little recovery in the A/D ratio...with 1625 stocks 
advancing against 1254 declining...but the numbers are 
hardly overwhelming. And even on Friday the number of new 
highs, 21 - was dwarfed by the number of issues hitting 
new lows, 161.

*** And remember, markets float on a sea of human 
emotion. A great swell of optimism, confidence and 
complacency,... must be followed by a trough of trouble 
and despair. My guess is that we are slipping down into 
the gully now - a trip that could take months, or even 
years, to complete.

*** It is dark, rainy and windy in Paris this morning. 
Throughout the Northern Hemisphere the weather, and 
perhaps the public mood, seems to be darkening. Stock 
markets are falling. Oil is rising. Central banks are 
tightening. Technology is disappointing. And the weather 
is turning cold.

*** Oil fell back by a little more than $1 on Friday... 
closing a penny short of $35/bl.

*** Gold gave back $4 - coming to rest at $274.80.

*** And the dollar went up. The dollar index rose 115.71 
points. Dec. contracts had the euro at 85.64 cents. 

*** 15 IPOs were scheduled for last week. But only 5 came 
out. So far this year, 180 IPOs have been postponed or 

*** "The Utilities Average is up 42% since last 
December," Dan Ferris reminds us. "{But] some Dow Utility 
components are still excellent values," he continues. 
"Unicom is trading at a p/e of 14 and yielding 9%. TXU is 
yielding 6.4% at a p/e of less than 10 as of yesterday's 

*** "...the market is going a lot lower," says our own 
contributing editor David Tice, quoted in the NY TIMES. 
"We could see a bump, but I don't think that will last 
more than two or three days. The Nasdaq 100 could fall by 
another two-thirds. Cisco is still selling at 19 times 
sales and 97 times earnings. We are focusing [our short 
selling] on four areas in technology: PC's, the Internet, 
telecom handsets and telecom infrastructure. Stocks in 
those industries cannot justify their current 
valuations." (see: Build It And They Will Come? Get Real.)

*** "When these stocks fall," Gretchen Motgensen points 
out in her column in the NY TIMES, speaking of tech 
stocks, "the throngs that bought them simply because they 
were going up have no idea what they're worth."

*** What are they worth? Ed Yardeni: "The successful and 
profitable [tech companies] are innovators. They sell 
innovations with high profit margins. But they have to 
sell them fast, before they too become commodities and 
are destroyed by the next round of innovation. The risk 
is that this process of creative destruction moves so 
fast that even innovators can't make any money because 
they can't recoup the cost of development quickly enough 
to achieve a positive return on their investment. This 
may already be a serious problem for the 
telecommunications industry." 

*** A professor at Bowling Green University is retiring 
in protest after 25 years in the sociology department. 
His beef?The department wouldn't let him teach a course 
on political correctness. Kathleen Dixon, the director of 
the women's studies department, told a local newspaper 
"We forbid any course that says we restrict free speech." 

*** On this day in 1793, Marie Antoinette lost her head. 
Well, she didn't actually lose it; the problem wasn't 
that she was forgetful. Her problem was that she was out 
of style. Democratic, majority rule had come into fashion 
in France. Poor Marie was guillotined.

*** DR reader JRH sends the following item:

"A freshman at Eagle Rock Junior High Won first prize at 
the Greater Idaho Falls Science Fair, April 26, 2000. He 
was attempting to show how conditioned we have become to 
the alarmists practicing junk science and spreading fear 
of everything in our environment.

"In his project, he urged people to sign a petition 
demanding strict control, or total elimination of the 
chemical "DIHYDROGEN MONOXIDE". And, for plenty of good 
reasons, since...

1. It can cause excessive sweating and vomiting;
2. It is a major component of acid rain;
3. It can cause severe burns in its gaseous state;
4. Accidental inhalation can kill you;
5. It contributes to erosion;
6. It decreases the effectiveness of automobile brakes;
7. It has been found in tumors of terminal cancer 

"The student asked 50 people if they supported a ban of 
the chemical? 43 said, "YES"; 6 were undecided; and, only 
one knew that the chemical was H2O.....water!

"The title of his prize-winning project was: "HOW 
GULLIBLE ARE WE?" The conclusion is pretty obvious!"

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weeks the information [you supplied] has produced a 
realized total of $23,210." 

- with Lynn Carpenter's F-O-X system, you'll be alerted 
to early price volatility in stocks like American
Express. Her readers bought bargain call options when the 
stock was at $54.38... and sold them the next day for 91% 

Follow this link - get in on her next trade:
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * 


I've been lovin' you...
A way too long...
Can't stop now.

Otis Reading

"Francois is having trouble turning the page," said 
Pierre. "His retirement is not going well."

Francois Debenest retired last month. He had come to the 
farm with his father in 1943. Francois was just 3 years 
old at the time. Except for a brief period in the Army, 
he spent his entire life working at Ouzilly, beginning at 
age 14. He even met his wife on the farm, Louisette, who 
worked as a maid in the chateau. And his son died there 
too - in an accident with a tractor.

Francois looks young for his age. He is in very good 
shape. He could probably continue to work for another 10 
years. But a feud with Pierre, dating back at least 20 
years, together with the French employment rules, made 
retirement seem like the best option.

Still, turning the page is hard. Last week, Francois came 
back, got out his scythe and began cutting down the weeds 
near the chicken house. He wasn't asked to do it. Nor was 
he paid for it. Or even thanked for it. The new farmhand 
actually seemed to resent the intrusion.

But Francois must have needed to feel the tool in his 
hand. For forty-five years, he worked the land, full time 
- with scarcely an interruption. How could he suddenly 
stop now?

A cold wind blew through Ouzilly on Saturday. After 
months of warm, sunny weather...everything seemed to be 
taken by surprise. I had barely finished painting the 
windows of the woodworking shop when the trees shivered 
and the rain began. Sophia and I retreated to the 
interior and began ripping the old, stained fabric from 
the living rooms walls. That, too, needed to be changed. 

Mr. DesHais continues his gardening, in good weather or 

"It's time to get the cold frames ready," he said, 
reminding me of a job I promised to do. 

"Your wife wants to have salad in the winter..." he 
continued, spreading the blame, "and you can't grow it 
out in the open. There will be frost in a few weeks. You 
never know this time of year. We could have a frost 
almost anytime."

Mr. DesHais hates change - except for the regular change 
of seasons and weather, which he welcomes like the visit 
of a kissing cousin. He is on intimate terms with nature. 
He understands it. And he despises people who ignore it.

"People in the city," he said, turning away from the jars 
of celery he was canning and cocking his head from side 
to side with an air of superiority, "don't even know 
where salad comes from. They buy it all year round as if 
it were a newspaper."

"But that salad, Mr. Bonner," his eyes narrowing 
confidentially and raising his index finger to make his 
point, "is not good salad!"

I cannot tell the difference between Mr. DesHais's salads 
and those you buy in the grocery store, but I didn't want 
to contradict the gardener. I had neither the time nor 
the vocabulary. So, I returned to my own work.

No one wants to turn the page. Francois won't go gently 
into the good night of retirement. Mr. DesHais refuses to 
advance into the last century. And investors have been 
loving 17% per year stock gains for too long to give them 
up now. 

The NY TIMES piece mentioned above tells of an investment 
club trying to decide whether to turn the page or not. 
The biggest position the club held was in Lucent - on 
which they had lost almost a third of their money. One 
member thought it was time to sell. 

"But despite their losses," reports the NY TIMES, "the 
club's member quickly decided not to sell Lucent - or any 
of the other stocks in their $67,000 portfolio." Instead, 
they decided to buy. Among the stocks purchased was 
Intel, because "it's a leader in its field."

You have heard the expression "a fool and his money are 
soon parted." What puzzles me, as Doug Casey once asked, 
is how these people got together with their money in the 
first place. But having made good money on the Big Techs, 
at least they are loyal to them.

The TIMES: "If the Nasdaq's plunge has eased last 
winter's fever, it has hardly eroded the underlying 
confidence in stocks that two decades of rising share 
prices and a decade of strong economic growth have 
instilled in America."

Investors believe in stocks, in general, and tech stocks 
in particular. The Nasdaq is down 18.5% so far this year. 
And many stocks have lost more than 90% of their value. 
Still, most investors remember the good times. 

The TIMES piece features comments that are typical of the 
early stages of a bear market, from a man who bought 
Yahoo in 1996. "My whole portfolio has 2,000 something 
percent return over the past five years," he said. "This 
was a down year rather than an up year, but I think if 
you're a long-term investor, you've got to take the downs 
with the ups." 

"I'm a big believer in tech," he continued. "I don't have 
any of those old-economy stocks..." and "I hope to keep 
pumping money into the market."

Investors have seen what happens when the market falls 
dramatically. The big dips of 1987 and 1998 were major 
buying opportunities. They think this one is too.

"Everybody, including myself," said Charles Geisst, a 
professor of finance at Manhattan College and author of 
'Wall Street: A History,' views this as a short-term 

I don't know what will happen in the stock market, but 
the cold weather is not just a blip. There will be some 
warm days before winter. But it will get much colder 
before we have another summer. Francois' retirement is 
not a blip either. He will find other things to do, but 
his regular work at Ouzilly is over. Forever. 

And so is, I would bet, the Great Bull Market of 1982-

Watching the weather, hoping for sunny skies...

Your servant,

Bill Bonner

P.S. I felt sorry for Francois, and miss having him 
around. I'm going to ask him to come back a couple of 
hours a day to cut up the dead trees along the driveway.
About The Daily Reckoning:
The Daily Reckoning... "more sense in one e-mail than a month of CNBC."  That's what readers are saying about The Daily Reckoning.

Bill Bonner, recognized internationally as a brilliant writer, entrepreneur
and publisher of The Fleet Street Letter, offers you his daily market
commentary absolutely FREE. For the first time, outsiders are getting a peek into his powerful and profitable investment insights. Bill's practical contrarian advice empowers even average investors to protect their hard-earned wealth and achieve amazing gains.

Bonner writes his email letter from Paris, France, each morning --
describing the wacky, wonderful world of investment, politics and everything remotely related. Irreverent. Sharp. Honest. Thoroughly, unabashedly contrarian. It's also among the fastest growing e-letter on the Internet.  It's a brand new service... but it has a distinguished history..

For nearly 62 year, The Fleet Street Letter, the oldest investment
advisory letter in the English language has consistently delivered
invaluable economic and political foresights to savvy investors. Current readers regularly enjoy impressive investment gains even as the market falters. Here's more from his online readers...

"My small portfolio has followed true to my wife's description of my
investment philosophy, "buy high and sell low." However, that has changed since I started religiously reading DR... I credit this reversal of fortune directly to The Daily Reckoning"

" Your Daily Reckoning is the best in business commentary... mixing
serious warnings and the state of the market with gentle humor"

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Last modified: April 01, 2001

Published By Tulips and Bears LLC