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Non-Tech : Dorsey Wright & Associates. Point and Figure
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To: Tommy Dorsey who wrote (674)10/5/1999 10:50:00 AM
From: bill meehan  Read Replies (1) of 9427
 
Tommy, hope all is well. Don't know if you saw current Business Week, which had an interesting tidbit (p. 42-42) about individual investors that I referred to last night:

I didn't get around to reading Business Week until yesterday, but I was
intrigued with a piece noting a JP Morgan study that found American's put
more money into tangible assets (SUVs, boats, houses, etc.) than into
financial assets in the first six months of the year. That was the first
time since before I was in kindergarten that's happened. And why not? Much
as companies have used overfunded pension plans to juice earnings while
borrowing money to buy back stock to cover stock options and enhance EPS
growth, individuals have also found comfort in tapping retirement plans and
borrowing money to live high on the hog. Yet, believe it or not, there are
still many economists that have yet to find "direct" evidence of the
so-called wealth effect. So, individuals have been liquidating stocks and
corporations have been net buyers, but not enough to absorb all of the
supply. And the cost of corporate borrowing used to retire stock has greatly
increased and appears to be heading higher, so it won't provide as much bang
for the buck. That's where the deficit comes into play. Overseas investors
have recycled part of their huge surpluses as big buyers of corporate debt
and US stocks, and with the dollar on shaky ground foreign investors may also
lose some of their appetite for our paper.
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