Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (3283)	7/27/1997 1:32:00 PM
From: White Shoes	of 94695

Likely the "trigger" will be nothing remarkable. It has to break sometime, based on the valuations. Some statistics from a Templeton fund manager: * % of U.S. household net worth held in stocks: AT AN ALL TIME HIGH * Americans have more $ invested in stocks than equity in homes * Margin loans to buy stocks are valued at 2% of the value of US economic production, AT AN ALL TIME HIGH If P/E ratios and dividend yields came back into line with 20-year averages, US stock prices would drop 40%. That puts us at 4850, give or take. If it turns out to be a "nice" correction we'll see 6000. A real bear market could exaggerate to the downside after a long decline, & could wind up in the low 4000's. A trigger could be the capital gains cut...IMO.

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