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Pastimes : Ask Mohan about the Market

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To: MythMan who wrote (14215)	2/17/1998 1:44:00 PM
From: Mike M2	Read Replies (2) of 18056

Pete, it is impossible for stock prices to continue to grow at a faster rate than productivity,incomes,profits,economic growth,population growth, et. al. The following is from Hamilton Bolton's "Money and Investment Profits" p.27 The basic ingredient of stock price valuation is earning power . A second factor of tremendous importance in stock prices is the rate at which the public is prepared to capitalize earning power. Changes in the evaluation of earning power go through well-marked, though not necessarily predictable, cycles influenced by: a) recent market history b)b6y what the public feels the trend of earning power , inflation, or other factors; and c) the dictates of the state of the economy at any given time. As you well know never before in history has the public been willing to capitalize the earnings power of the U.S. stock market at these levels. The trend is your friend until it ends then look out. i see this mkt as a Ponzi scheme and a confidence game of unprecedented proportions. I have to go back into hibernation growl-g- mike

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