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Press Release
7-22-02--BBFG’s Response to Current Market Conditions
....is the number of consecutive weeks that the US stock market has declined.
As painful as it is to experience the environment that we are currently in, we encourage you to think not of where the market might be tomorrow but where it might be in five years. Throughout the weekend, I kept hearing confirmation that the economic fundamentals run counterintuitive to the performance of stocks. With low inflation, low interest rates, and steady albeit slow GNP growth, stocks should be responding affirmatively. However, the market is a supply and demand "store". Right now, demand is virtually non-existent. As a result, indiscriminate selling feeds upon itself and collapses prices. This scenario may well continue during the coming week. With the Securities and Exchange Commission giving US corporations until August 14th to swear allegiance to their accounting records, the next three weeks could also be quite tumultuous.
But unless you question the construct of our capitalist system, it is imperative to resist the urge to capitulate. The market is littered with investors who sell at market low points. If you have a long term horizon, you should certainly not exit from stocks at the present time. If your time horizon is short or your portfolio is providing you with current cash flow, then your legitimate concerns are being met with utmost scrutiny on a individual basis by our staff.
While I cannot confess to being a disciple of Louis Rukeyser, I did happen to catch his show a couple of times last week. He does come up with some catchy quotes, some that make you roll your eyes and some that are quite memorable. The Rukeyser quote that I paraphrase in closing is (with apologies for the lack of gender neutrality): "These are the times that try men’s souls; and the times that make the brave wealthy."
It is 10:00PM, and the Japanese stock market, after falling over 2% in the first 30 minutes of trading, is now trading up 3/4% before the end of the second hour. We will all hope, I am sure, for a recovery and a return to normalcy in the US markets as soon as possible.
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