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Technology Stocks : Oracle Corporation (ORCL)
ORCL 201.95-1.5%Nov 28 9:30 AM EST

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To: nanu swamy who wrote (4530)12/16/1997 11:59:00 AM
From: Mo Chips  Read Replies (1) of 19080
 
Yes, the Fed can affect the supply of cash, but that does not guarantee that the funds will go into the market driving up stock prices. MMs and investors go through the risk/reward analysis and then make the decision to buy or sell. The risk free rate of return is a variable in this equation, but it is not the only variable.

I agree that there is some effect from the actions you describe, but as you put it..." I think that the DOW is right now under computer control and is being held "artificially high" to keep consumer confidence up. If the Fed stops pumping money into the market, the DOW would collapse like a rock and so would all big cap stocks..."

I completely disagree with this hypothesis.

Besides, the Feds Funds rate hasn't changed, has it??!!

I agree with others, don't put too much faith into this book...

Mo
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