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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Bilow who wrote (8620)	6/5/2000 5:37:00 PM
From: Hockeyfan	Read Replies (2) of 18137

Mean Reversion: 100-yr vs. 8-yr IMO this is why the 100 year valuation average is no longer applicable. -Tech Re-Shaping U.S. Economy -Study By Caren Bohan dailynews.yahoo.com Industries built on telecommunications and computers accounted for nearly a third of U.S. economic growth last year and have played a major role in boosting productivity and holding down inflation, the Commerce Department said on Monday. During the period 1994-1998, IT reduced overall U.S. inflation, as measured by the gross domestic product price index, by half a percentage point to 1.8 percent from 2.3 percent. ``The rates of decline in IT prices accelerated through the 1990s -- from about 1 percent in 1994, to nearly 5 percent in 1995, and an average of 8 percent for the years 1996 to 1998,'' the report said. ***** We are experiencing a technological revolution that is globalizing the world markets. The impact of IT developments on inflation and productivity improvement in the service industry, which isn't accurately measured, is tremendous. Much like the inverted yield curve, which is likely to persist for several years, we have entered a new paradigm which makes comparison to old data impractical. Many of the OLD rules don't apply anymore. Market valuation using 100-year data is one of them.

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