Monday, November 8, 1999

Hand-Holding 101

By Raggmopp

One of the reasons folks use a full service (what, you don't get a discount?) broker is so that they can call up "your guy" -- oops "account representative" -- to say "Wahhhhhh, my stock is getting clobbered." At which point your RR (registered representative) would probably recommend you do something to generate some more commissions. I say that in jest as there are some fine RR's out there who really would tell you that BIG BLUE is NOT going to go broke before Santa flies and to stay the course.

But if you've been here any length of time you already know not to obsess over every wiggle and giggle in the market and/or your individual stock. So a DOW component lost more at one fell swoop than the GDP of Sweden, so what? Do you care? Well, maybe from a historical perspective, but unless the day of the drop was the day you were required to sell to pay for your daughter's wedding, no harm no foul. And as we all know, you should not be taking market risk with funds you have earmarked for other purposes (maybe she can still elope).

Which brings us to the health of Mister Bull in general. Is this the end? Has Mister Bear taken over? Will Pepsi buy out Coca-Cola? Not bloody likely. Remember, on Wall Street the old joke goes, "A pullback is when your neighbor loses his job, a recession is when you lose your job, a depression is when your wife loses her job."

So here we are, knocking on the door of 10,000 on the DOW as I pen this. Which is less than 12% away from the all time highs. Not 20%, not 30% but less than 12%, well within the definition of a "pullback." And has e-commerce reached its peak? Has unemployment suddenly surged? Seen anyone on the street corner selling apples? Nope, nope, and nope.

So sit back, relax, and let your sound and prudent investment philosophy work its magic. Now, when someone at a cocktail party bemoans, "Wahhhhhh, my stock is getting clobbered," you can smile serenely and say, "Do tell?" Feel better now? Your invoice is in the mail.

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