if we go into a recession or bear market

[Foghatlive]

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Also, an important distinction that no ones made, a recession and a bear market are 2 completely different things.

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Beat me to the punch.

Although I'll add, that stocks often do quite well during recession, IMO, because specialist can use a recession to move up prices without taking major hits to their inventories.

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Huh? [img]/images/graemlins/confused.gif[/img]

I dont understand?

Stephen

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In case you're not familiar with Richard Ney, he was a very successful investment advisor who wrote a few books in the '70s, in which he goes into great detail about the Specialist system.

He describes Specialists as merchants with a unique inventory problem: they have to get their product back from their customers.

He says that Specialists buy their product (stocks) at wholesale, then, CREATE demand by raising the price, selling and short selling at the top (retail), then, dropping the price to where they can buy and buy to cover at wholesale, then, repeat the process.

His investment approach is simple: Buy when the Specialists are buying and sell when they are selling. Of course, it's easier said than done.

But, the point is that a recession is a good opportunity for a Specialist to move his merch from wholesale to retail without too much of it getting picked off because the public is wary about getting into the market during bad economic times. When the recession ends, the optimistic public jumps back into the market just in time for the Specialists to pull the rug out.

I was recently on the NYSE page, they sell a service in which you can track Specialist sales. The service costs $3000 a month. So, chances are that Ney was on to something.