Hey! It happened! The market took a nice dose of good old fashioned gas, as we have been predicting! The Dow Industrial's decline was 216 points, a nifty 2.3%. Not to be outdone, as a sort of financial pride, the Nasdaq fell 66 points or 3.3%.

Gee, I am so surprised. I thought stocks were going to go up every day, forever. I am awe-struck at the long range perspective of even the most seasoned analysts. When the market is making new highs, they all merrily chirp about the market's unstoppable power, fed this time by the great amount of money on the sidelines that must be reinvested.

So what happened today? Don't fund managers have any money to invest today? I guess not, as I didn't hear one solitary analyst say anything good about either money flows or eager fund managers. Instead, they're talking about year-end selling and markets being over extended. No kidding. I mean, they must read some of our back columns. What gets me, is that whatever they see on any given day, is the new trend.

You will be interested to know that the Internet stocks got killed today. I don't mean missing in action and presumed dead. I mean DEAD. I know because I counted the bodies, and I will treat you to a "picture" of the carnage, with a little perspective thrown in for good measure:

It is instructive to watch the greater fool theory at work. From High to Close, check the losses on these stocks. Many of them started off with a bang, but their excesses finally caught up with them. Of course, they weren't helped by the ugly rumor that the Fed may institute selective higher margin requirements on such stocks, based on very high individual stock trading volume compared to outstanding shares. Anyway, although you may have heard more than you want to about this subject, it is striking to see the numbers laid out. These price moves are absolutely historic and will be talked about forever like the good old tulip bulbs. That's not to say that AMERICA ONLINE and YAHOO won't go on to greater heights, but many of the rest may well be distinct losers.

I hope you have taken some of our advice and accumulated cash and prepared your shopping list. Patience should still pay, and you may not want to pull the trigger and buy too soon. If the market retraces up to one-half its gain since early October, there is quite a way to go. Just be glad you have cash, look in the mirror, smile, and say "Yes indeed, cash is king!." Stay tuned.

The Market Pro - November 30, 1998