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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Alan Bell who wrote (1431)9/4/1997 1:46:00 AM
From: Tim Bagwell   of 42834
 
Alan,

Bob is a believer in the importance of a slowly growing economy. He usually likes numbers in the 2-3% range for the GDP as we have been experiencing lately. If growth exceeds that level then it can lead to higher inflation which puts a damper on the stock market. Note that this is in stark contrast to what many politicians believe.

So slow growth in the economy is bullish for stocks in Bob's view.

Since Bob also believes that the P/E on the S&P 500 is near its all time high the only growth in stocks will come from corporate earnings. Earnings should continue to grow if the economy does not overheat. So a slowly growing economy is the key.

Regards,

Tim
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