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Politics : High Tolerance Plasticity

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To: CpsOmis who wrote (8241)9/19/2001 8:25:40 PM
From: jim_p  Read Replies (2) of 23153
 
Cps,

What you say is true, but the market is a function of supply and demand.

First we have record amounts of cash on the side lines which causes the pent up demand for securities to be high.

Second we also have very low interest rates and very low inflation which tends to make stocks more attractive vs. bonds. The stock market is a fraction of the size of the bond market.

Next bonds have no where else to go but down, so the smart money is starting to take profits and are exiting bonds for stocks.

We also have liquidity growing at record rates.

Don't forget about the VIX. Stocks are very over sold here.

Lower energy costs will be an incredible boost to the economy and that will be factored into the market soon.

We will have an economic stimulus plan announced soon, and investors want to be in the market prior to the announcement.

Stock valuations have not seen the extreme lows of prior bear market, or have they? Based on low inflation, low interest and pent up demand for stocks they may have.

After today, I'm 100% invested and will be watching tomorrow with an extra large sized popcorn and an economy size box of milk duds.

JMHO,

Jim

PS: Don't forget the locus are gone :-)))

PPS: Don't be a deer staring in the head light when this market takes off.
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