Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Market Tracker who wrote (13506)	9/5/1998 10:24:00 PM
From: peter michaelson	Read Replies (2) of 18691

MT: At the May 1998 highs, these investors had unrealized profits of $647 billion, or an appreciation on their investment of 61%. When the Dow Industrials sagged to 7539, this grand pile of dough melted by 43%, he figures. The economic theory I subscribe to says that this decline in market values will result in a rise in the savings rate as people will not rely on their market holdings to be their savings. A rise in the savings rate (which has been historically low in recent years) means less spending and therefore less corporate profits and therefore even lower market valuations. Forget the theory of this savings being more investment chasing stocks causing a run-up. That's not what any of us would do in saving for the future during these times. JMHO Peter

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