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Pastimes : Ask Mohan about the Market

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To: Jack Clarke who wrote (15544)	4/24/1998 11:08:00 AM
From: Mike M2	Read Replies (1) of 18056

Jack, zeev's explanation does sound good but one major problem is as stock prices rise buybacks have less impact because the company's money buys fewer shares. I agree that this tactic has been extremely effective but it's potency is diminished as prices rise. george soros said people have linear expectations in a non linear world. He also said something to the effect that the trend in financial mkts is based on lies, misinformation and half truths.The trick is to know when to get out. well I'd rather be early than late. The market cannot continue to grow faster than the economy indefinitely but many participants feel it can-at least long enough for them to get rich. Not only are PE's high but the quality of earnings is suspect in many cases. Martin Barnes was interviewed in Barron's -Nov 96 ? He goes into detail about the options accounting scam and other issues concerning the quality of earnings. Look it up in the library. We must remind ourselves that much of what we hear from the mainstream business press is from Wall St. and the mutual fund industry and they have a vested interest in the continuation of the bull mkt. Their attempts to rationalize this insanity are pathetic in my opinion. Mike

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