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Technology Stocks : WDC/Sandisk Corporation
WDC 162.40+2.9%3:59 PM EST
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To: Ausdauer who wrote (10913)5/9/2000 7:59:00 PM
From: Rocky Reid  Read Replies (1) of 60323
 
Ausdauer said:
>>...did everyone stop contributing to their IRA's all of a sudden? I thought unemployment was at an all-time low?!? Where is all the cash sitting on the sidelines going, to bonds?<<<<

This goes back to what I've been saying. People are not contributing to their IRA's right now. They are trying to cover their Margin positions in their regular accounts. This is where the individual money is going, IMO. The overall Market was severly overextended and way out on Margin a few short months ago. The overal Market is now paying for that credit overextension and "paying the bills" by paying down the debt. -at least, that is what I hope is gong on.

It may take a still a couple of months more time for many individual investors to be raise enough capital to fully pay down their Margins and have extra cash to throw into the Market (of course by then, Institutions will have most likely established big positions and driven up overall stock prices by some degree first)

I hate to be a downer on the board, but my current pessimism is real because of the realization that many short-selling hedge funds were exactly right a few months ago when they were getting murdered by runaway stock valuations. They were saying that margin debt was completely out of line, and valuations were insane. I'm on board this train of thought now and still think valuations are too high for a lot of stocks. Unfortunately, good companies like Sandisk get taken down in the irrational fray as well.
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