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Politics : Ask Michael Burke
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To: Tommaso who wrote (69168)11/7/1999 1:27:00 PM
From: James F. Hopkins   of 132070
 
Tommaso; I follow your post from time to time as I have you
bookmarked & I justify taht if not so much for your wisdom as
for the candid way you say what you do.

I posted something on the A/D line myself not to long ago but forgot
where, and it likely didn't make sense.
I can try to express a perfectly valid idea and more often than not
I mangle it into an incoherent abstract that resembles a fictional
fantasy of poor taste.
-----------------------------
Now about the A/D line.."forget it", no one knows the facts
contained "in it" what I do know "about it" is
that because of market factors it is doomed ( over time ) to
under perform the major indexes.
Consolidation of stocks, ( mergers and buy outs ) keep plucking
many of the advancers right out of it, and leaving behind the
dogs. I don't know of anyone who "adds up" all the companies
who would be in the Advance part of the A/D if they had not
wound up in the fold of some larger giant. Just look at
how many companies MSFT & GE have bought up over the years,
take all of the high flying companies who have gone up via
road of additions , then add all those additions to the A side
of the A/D line any time that company goes up.
Well yes we could also add them to the D side when it goes down
but what is or has been the longer term trend.
The A/D may be useful "very short term" but taking it serious
over a long term will produce a more negative out look than it
can justify.
-------------------------

The market will have serious problems when the baby boomers come
of retirement age, "about 2008 - 2010". As the demographics will
be such that the Gen X ( who will be outnumbered ) will still
have to buy the stocks that the older Generation are going to try to
use to maintain a life style.

Coupled with the demographic problem
is the "bond" problem and it just happens to fall due 2007-2011
the time for the 30yr cycle of high interest rates should fall
about then. The old coupons sold late 70s and early 80s all mature
and the "old money families" who count on the leverage afforded
when they hold bonds issued at super high rates will manipulate
rates back up come hook or crook before they swap out the old
30 yr coupons for new ones.
Jim

Ps The A/D anomally is also similar to the reason why the R2000 can't over time out run the major indexes..the good ones keep getting moved out of its' index, it's hamstrung much the same way the A is towards the D on the A/D line.
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