Berney,
Thanks for the response.
I looked at the Mutual Fund report and you're right it's very interesting.
Of course it leads to more questions and gets me even more excited about this whole, what I would call a mystery!
Here's my take with this issue and I don't think there is an answer, but that's why I guess I keep thinking about it!
Null Hypothesis: (This is a win, win hypothesis as if there is no difference, we're right, if there is a difference, we've discovered something)
This states, in this case, there is no significant difference to be found in who is controlling the money and the increase in the money flow, both in and out of the markets.
My Hypothesis is this:(and you eluded to it)
1) Depression people," to invest in a bond vs. a CD is an aggressive move for them."
2) As this group has become older. They have started to FINALLY relinquish control of their money via investment styles, to the boomers/aka financial advisors and managed funds.
a) there style prior to this WAS CD's and ANNUITIES.
1) Both styles that when they started investing were safe and
consistantly profitable.
2) Over time though, living standards have changed, and the
need for more aggressive investing styles has evolved, in
order to, "Keep up with the Jones'". Which is a philosophy
they developed!
b) Problem: They have NO IDEA how to do aggressive investing.
1) They DO have the resources, however, to find out who
DOES understand this style. Their children/the boomers!
c) Hypothetical Solution: They pull their money out of the
mattresses/CD's Annuities and turn it over to the boomers
to invest.(Not understanding the boomers style, but
knowing it works.
3) Now just figuring the population break down based on age were
equil! 33% young people, 33% boomers, 33% seniors. (Which I doubt
very seriously it is!)
a) Over the course of the last 10 years we have been shifting
the investment style and at least 2/3 of the money(assuming
the money is equally distributed, which I doubt it is.)
From the depression type investing style to the boomer
style!
b) Berney, This would put the boomer generation in control of 66%
of the capital in this country as opposed to 33%.
c) I figure though the depression people and the boomers
control maybe even more than 66%.
d) Keeping the generation X yahoo's have learned from the
two previous generations! They've grown up with the
markets! They have stock options built into their
employment contracts! Now of the 33% of the generation X
kids(all things being equal population wise) How many of
them are NOT investing? The minimum wage ones? Even that's
questionable from a 401k standpoint!
FINALLY: I have to question the validity of the statistics we are
given. I feel the numbers that have not been considered,
are the Sociological ones of the times. The breakdown of
data based on age and knowledge about the use of the
markets for income and cash flow!
Depression people: Fear the markets and don't want to
look at them.(But they are becoming more heavily invested
in them! Through turning over control of their money to
the boomers). Their only requirement of the boomers is:
don't tell us where you put it, we don't care! Just make
us MORE MONEY!!( Their philosophy has always been:
We don't care how! Just show us GOOD RESULTS!)
Boomers: JUST AN IDEA HERE: They saw the results of
Physically defeating a country in war, ie:
Japan! Only to be ecomomically defeated again later
by the same damn country!(Economics is knowledge
and Knowledge is Power)
This generation refuses to do Physical war but
has become efficient at economic war! Less Messy!
Hence! The Evolution of the Markets as opposed to
bombing people. IE: Regan bombed Iraq. Clinton
TALKS about bombing Iraq! Clinton doesn't he just
tightens ECONOMIC AID!!
Generation Xer's: They grew up with the markets and continue
to contribute as much to them as they can afford.
They've learned what boomers have preached and
have begun to learn! "Let the Money Do the Work!"
ALL THIS CONSIDERED:
Are the markets over valued? Maybe? Maybe NOT? My perception is this:
They become dangerous when: A significant number of people begin to
LOSE Faith in them as a viable means of income, all at the same time,
and begin PULLING MASSIVE CHUNKS OF MONEY OUT AT A TIME!(This is why GURU's and Fund Managers NEED to be monitored by the masses! They are the New Generation of terrorists, if not controlled!)
I believe: They markets could be fairly valued at any #'s one wants to pick, as long as, the masses agree! I think this may be why someone like Bill Fleckenstein bothers me! He likes to scare the
SHEEP from time to time, for profit! The article he did on market insanity really pissed me off! WHY? Caues he had to single out NIKE
just after I bought March 47.5 calls on it! Had he kept his mouth shut or mentioned another company! I think I could have sold the calls and made a couple bucks! However the Terrorists, had to spook the flock and cost me money! OH well, He's a GURU/TERRORIST and I'm NOT! Thanks a bunch BILLY!
Just some stuff to consider Berney.
Have a great day,
Your buddy,
Jay
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