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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: OldAIMGuy who wrote (5495)	8/31/1998 2:33:00 PM
From: JZGalt	Read Replies (2) of 18928

Tom, thread, before you get too excited about the IW numbers I think I should remind you that this is likely to be a pullback unlike any other we have seen in our investing lifetimes. This pullback will be driven via lack of earnings growth, not lack of earnings growth on top of inflation. You should have heard by now that "Bull markets do not die without an uptick in interest rates!" That has been true for at least as long as I have data going back to the mid-1960's, but with the exception of the early 1990's you also needed earnings growth to continue a healthy market. I'm not trying to scare anyone, just reminding people that this market is reacting to the possibility of a huge contraction in global economic activity. If that doesn't occur, great! we have all bought some very cheap stocks. However if you sink a heft percentage of the world into hyperinflation, recession and depression, there is less of a chance that the US economy can continue to expand. Right now I am just a bit on margin, because the meltdown doomsday scenerio is unthinkable, but at this point in time, I see no reason to max out that margin capability. Wait and raise cash if you are uncomfortable. ---- Dave

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