5 www.taipanonline.com FEBRUARY 2004        I have just lost a bet, and to
be honest, I’m really rather
pleased. And if you are holding
American stocks, you should be
too.        As long-term readers well
know, I have been quite suspi-
cious of the rally of the past 11
months. You could think of my
problem as an overdose of
knowledge: I’ve read too much
on the risks the White House and the Fed have taken to extract the market from
its post-bubble, post-9/11 doldrums. I know that,
historically, it has been far easier to debase a strong
currency than to rescue a debased one.        My suspicions are born of both historical reading
and personal experience: I sup-
pose the indignity of having to
bribe the local gas station manag-
er in 1972 just to get a job wiping
windshields on Saturday mornings
has left an indelible mark on my
soul. It certainly left me with a
strong distaste for attempting to
outrace double-digit inflation—  and
I still shudder at the sight of a
“WIN”  button.        So when a fellow I know in the
business offered to bet me that
Bush and Greenspan’s policies
would successfully put the
American stock market into dou-
ble-digit gains in 2003, I gladly
took him up. This was, to my
mind, a sucker bet: surely
American investors would see the
risks involved?        What kind of idiot am I? I had
clearly forgotten one of the most obvious tenets of
political and economic history: The herd doesn’t
give a rat’s patootie about long-term risk.        While the mob may be quite enthusiastic about
burning down the presidential palace when the
time comes for the austerity measures required to
rescue the economy from an inflationary spiral, most voting populations will overwhelmingly sup-
port a political régime during the initial process of
over-minting and over-printing, when more avail-
able cash seems to put more real money in every-
one’s pocket.        Now I owe my friend a bottle of wine.
Unfortunately, he prefers a rather old and some-
what rare port. That is what I get for depending
overmuch on subjective experience.        Fortunately for WaveStrength aficionados, I was
able to change track both in my services and here in Taipan (if not in the pub) and get on board the long march, which now looks like it will continue at least
through to the next key node on our S&P 500 chart.
Price-wise, that would be 1,315. Time-wise, look for
this to happen by July of this year.        In fact, because this month looks to be the sec-
ond flat portion of the cyclic lag-and-jump pattern
that has established itself in the S&P, now might be
a good time to add to your holdings in Spider (SPY:AMEX) shares. Next… A lost bet and a winning proposition The S&P 500 is on track to match 2003’s gains, possibly
as soon as June 2004 Adam Lass