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Strategies & Market Trends : John Pitera's Market Laboratory
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To: John Pitera who wrote (7873)5/20/2007 9:02:22 PM
From: robert b furman   of 33421
 
Hi John,

One thing I believe is a credible threat:

In a world of massive liquidity - inflation of equity prices has so far been tame - that may not last.

When foreign trade reserves can chase after brand equity - a shift in valuation will be inevitable.

Over all of the years of massive advertising ,current valuations merely approach the expenditures incurred to create the brand image - certainly not the costs of the intitial or replacement investment made.

Classic example: Cerberus buys 80% of Chrysler for 7.4 billion.


I'll bet 7.4 billion is less than the advertising budget for the last 5 years (half of Daimlers ownership period).

If private equity gets funded by foreign currency reserves,
we'll enjoy an equity valuation explosion that will dwarf all past bull market rallies.

Example:LLTC sold a secondary that was declared to be used for stock buybacks.The buyer of the secondary was an already established equity firm that held a substantial position.MORE OF THIS TO COME IN MY OPINION

The result:

Message 23558226

You guessed it - it ocurred at the gap up.<smile>

There ARE after all, declining amountS of equity shares out there.

Now if only we can get the Arabs chasing after the Chinese who are all buying stocks - We'll get us an equity Cartel going.

Sounds outrageous or does it?

Bob
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