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Strategies & Market Trends : The Stock Market Bubble

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To: Roger A. Babb who wrote ()4/18/1998 12:35:00 PM
From: Roger A. Babb  Read Replies (3) of 3339
 
I will start off the discussion with a contrarian view:

It is possible the the current bull market is not a bubble, but is a predictor of very large economic growth to come. Here are some arguments for this case:

1. The world is mostly at peace. The pecentage of world income being spent (wasted)on military hardware and the use of the hardware to destroy commerce is at a historic low and shows no signs of returning. We are truly headed toward a single world economy.

2. Interest rates and debt levels generally increase dramatically during a bubble and "running out of money fuel" is usually what breaks the bubble. But today interest rates are the lowest in many years and do not even exhibit a clear upward trend.

3. Technology is moving rapidly with advances in all areas. Many exciting new concepts are on the verge of becoming commercial. Productivity is increasing. People are becoming more educated.

4. Energy prices are low and energy is plentiful. The economy is not bottlenecked by shortages.

5. There is increased communication between individuals and companies that now crosses distance and political boundaries with ease. The Internet and this thread are examples.

Maybe we are not in the end stages of a market bubble, but are in the beginning stages of great economic growth.

Roger
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