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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 680.59

+0.6%

Dec 19 4:00 PM EST

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To: Haim R. Branisteanu who wrote (51384)	5/20/2000 11:26:00 AM
From: Stephen M. DeMoss	Read Replies (3) of 99985

Thanks for your response! Still the question remains, "What to do with this new money created from the booming economy?" The reason, IMO, the markets are inflated is because our options are limited in what to do with this new cash. The problem will remain with us for the forseeable future. That is why I do not see us pricing stocks at 'true valuations' anytime soon. We paid off our home, bought new cars (cash), went on vacation...Now what? Started 2 more business...Now what? Put it under the bed? If the economy is so hot we have to keep raising rates, its hot enough that people will have surpluses which must be 'parked'. The selling right now (to me) is not related to a new understanding of valuations. I think it is what it is because of the leverage people were using and thus the margin pay back taking place. Shortly those who were fully leveraged will be out and the institutions will be in and we will re-test highs in a year or so. Just my opinion. THE MONEY HAS TO GO SOMEWHERE!! Steve D.

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