I conducted a very unscientif-
ic study the other day. I was tip-
ping a beer in the presence of a
bunch of wise guys—smart, well
informed Washington and New
York types, real masters-of-the-
universe—guys who figure that
they either know or perhaps
even control the fate of the stock
market.       In reality, they are all naught but wage slaves for
the real shakers and movers. But get a couple of
pints of Guinness into ’em and they’ll claim to be
able to move the stars in the firmament, never mind
the price of the S&P 500.       The questions at hand: Is this rally the real deal?
How far will it go? What could cap it off? And when
will the waitress bring our steaks? 3 www.taipanonline.com MARCH 2004      But that’s not all:
     While the Chicken Littles have been predicting
not only a stock market crash but also the uncere-
monious demise of the US real-estate market
since 1995, we have been riding the dynamic
waves for years. Thus far, we’re quite happy with
the results. So are our subscribers. Taipan mem-
ber Warren B. wrote to us today: “ I bought 1,000 shares of Impac Mortgage Holdings about nine months ago for about
US$15.00 and have reaped the huge dividend as
well as a very good appreciation in price. I wish I
had bought a lot more of Impac. Thanks for your
good advice on other stocks, especially the
Chinese companies you recommended. I have
done very well with them.”      For perspective: We recommended Impac
(IMH:NYSE) as a yield play on the US mortgage
and real-estate market in the July 2001 issue of
Taipan, when the stock was trading at US$7.
These days, it trades at close to US$21…    not to
mention the regular double-digit cash dividends.
(Of course, pragmatists that we are, we don’ t
expect trends to last forever: As the real-estate
bust in the early 1990’s proved, no asset is safe
from downward pressure. Which is why we rec-
ommend you observe a generous trailing stop of
25% to 30% on your IMH position.) What’s up for the US markets? From the vantage point of 20-20 hindsight, it was easy to call the markets last spring. Last year,
stocks were low. (Of course, some were saying
that stocks were still overvalued, still overbought.
Chances are they will never change their tune.)      But other than gut feeling and comparative
analysis, you had a few hands-on facts to go by in
weighing the upsides and downsides of US equi-
ties. Many actually traded at less than cash and
had a great deal of insider buying. As far as we at
the Taipan Group are concerned, if you can find a
company that has more dollars in the bank than
the amount at which the stock market values its
entire assets, and the smartest people in said com-
pany are buying shares, well then, that’s a no-
brainer. You buy.      Today, things are a bit different. You actually
need to put in a bit of sweat equity, dig a little
deeper, seek out historical precedent, study the
charts or discover little-known new technologies
whose “              stories” have yet to make their way through
the media-driven phases of investor interest.      For this issue, I asked our editorial board to
take a step back and look at the big picture. The
year appears to be rich in dynamic trigger points
and catalysts…    ranging from Iraq to the presiden-
tial election to a potential rate hike by the Fed. What they’ve come up with is a sober, stripped- down assessment of market reality. For you and
me, it provides a blueprint of what to expect from
the markets in the next three to four months. n Next, please… Evidence—scientific and otherwise—that the
S&P 500 will rise another 200 points
between now and midsummer Adam Lass