Subj : Market Action To : All From : Paul Rogers Date : Wed Nov 12 2003 04:55 pm

Today's action was marked by a sustained rebound.  Prices rose nicely on
better volume, though that's to be expected on yesterday's light holiday
trading.  Volume ended -3% below average.

Last evening I heard a trailer for a documentary on the drug industry.
The quote went something like:  "If you don't provide the industry with
the opportunity to make good profits, they won't have an incentive to
develop new drugs."  That probably sounds reasonable to most people,
this wasn't the first time I'd heard it.  But this time I got a mental
"tap on the shoulder" and one half of my brain whispered to the other
half, "there's a word for that."  Can you say "extortion", boys and
girls?  That begged the question, is it really true?  Would a company
not persue a line of business just because it couldn't have a guaranteed
monopoly, if it made less money than it might under those circumstances?
Things have been changing recently since we've got protein and DNA
sequencing whipped, but for the past several decades the drug industry's
research methods have been very expensive because they've been a "hit
and miss" shotgun approach.  Maybe without a monopoly and guaranteed
"charge whatever the market will bear" profits, they'd have to focus
their research and work a little smarter.  Doctors tell us there are
many "orphan" drugs which work very well, sometimes as good as the
patented drugs, which go begging for manufacturers.  Who says we NEED
the new drug, if it isn't a lot better than what we've got?  Do you
always buy the name brand drug, or the generic?

My point here isn't to indict the drug industry, though there seems to
be more than a little smoke around there.  I'm following up on my
commentary Monday when I mentioned "contrarian insight" and "self
introspection".  There's a lot of "information" associated with the
market all the time. A lot of it is BS.  I believe to be a good investor
you need to develop a sense about what is "common knowledge" that
influences the herd and can be dangerous to follow, and what is a clue
to some important truth hidden out of sight.  You only have so much time
to invest, so you can't chase every will-o-the-wisp.  But you do need to
ask really good questions, like: is an industry's business model, like
the drug industry, really sound?  Or is it artificial and unsustainable
over the long run?  Remember the "dot coms" and the Internet bubble?
I'm talking about more than just skepticism, though that might help.
Start by looking at and rating questions.  Figure out what the really
good questions have in common.  Learn to ask those kinds of questions
about investing.  Have the courage to ask them of your investments.

Price     Vola-     Momen-    Volume    Oscil-    Summ.
Change    tility    tum                 lator     Index
 -__+      -__+      -__+      -__+      -__+      -__+

 __|_      >___      __|_      __|_      __|_      ___|     11/06
 __|_      >___      __|_      __<_      __|_      ___|     11/07
 _<__      |___      __|_      _|__      _<__      ___|     11/10
 _<__      |___      __|_      _<__      _<__      ___|     11/11
 __<_      |___      __|_      _<__      __<_      ___|     11/12

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: Buy        Date:  10/01/03 S&P:    1018
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '01-'02 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.angelfire.com/or/paulrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html
.... Of course, I could be wrong ..... Naaah! ___ MultiMail/MS-DOS v0.35 --- * Origin: The Bare Bones BBS (1:105/360) .