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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: Killswitch who wrote (14447)8/24/2002 11:43:11 AM
From: dvdw©  Read Replies (2) of 19219
 
I disagree with Bronsons take. The Mutual Fund industry has enormous Tax Loss carry forwards and they have already begun using those in marketing to show investors that Distributions wont be taxed at the same rate as before. The damage is already done to most of these companies. Great fund managers have already rebalanced and are building portfolios again. IMO this years tax loss selling season has already happened.

The caveat emptor to the market for investors today, is this;

Those who have been kick starting portfolios by accumulating stocks since March 02 have already set up a Capital gains clock, it's providing a daily tick tock I'm on the clock scenario, which makes harvestable gains a strong (er) possibility for April or May 03? Maybe Not...

The near term gottcha here will be tax treatment of Dividends and Cap gains. The wording behind these proposals will dictate whether or not we have more near term set ups by Mr Market. New Products are coming soon, these new products are designed as replacements for actual securities, the trading community is being encouraged to embrace these new products as better than choices out there now.

Owning actual shares is being discouraged by the trade. This means the trade would like to move investors to instruments for liquidity as opposed to Investments in securities.

These attemtps will create less competition for forward fundamentals, and will be ingrained in the next generation of investors. Supply and demand metrics are at the root of the trades desire to move Investors and traders into alternatives other than Securities themselves.

When we have a return to Dividend metrics, scarcity will play a major role in pricing. The pendulum is swinging back to an old idea, shareholders buying stocks for income. This setup going on now, positions smart money to accumulate positions under the guise of ugly market conditions. Hedge funds act as surrogate hatchet men to continualy paint the negative tone, which keeps competition out of the market.

Once the law's change, the prices of securities will rise dramaticaly and scarcity will rule once again. Pricing will more likely resemble Berkshire Hathaway ( relatively speaking), and why shouldn't it? Reverse splits should begin to be announced as companies realize the metrics of performance are about to change.
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