Dear William, I think people bet on our technological future and that is the reason for the high stock valuations. Also, I believe the US will get inflows of money from people abroad who are worried about the Y2K situation.
As you know, it wasn't too long ago that we discovered that a New York Bank was used to launder Russian mob money. Do you think that has stopped? Perhaps, the money flows through Genevea or Zurich b4 it is delivered to the US. No one really knows.
And from what I read, the Y2K problem is a serious problem for other countries, especially Asian countries. They may move their money here.
I've grown use to these new valuations so it is difficult to get a perspective on the situation.
But, as crazy as it sounds, I don't see why the average American investor would panic and pull his/her money out of the stock market at this time unless it is to pay for taxes on capital gains.
On the other hand, the author of an article in The New York Times pointed out several weeks ago that most Americans are in debt and do not have that much money to put in the stock market. I have one credit card. Most Americans have 15, according to statistics.
Personally, I try to do a balancing act. When I buy shares, I try to find shares to sell so that I always have cash on hand so I am never fully invested.
Still, I think the market could rally until the average American develops a tiny fear about January 1, 2000 or the first banking day of the new millennium. Even I wonder if I will be able to log into my brokerage account successfully on that day.
So the rally may continue for awhile.....
Mephisto |
