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Strategies & Market Trends : Tech Stock Options

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To: AlanH who wrote (55831)	10/19/1998 8:54:00 PM
From: Magnatizer	Read Replies (2) of 58727

Alan I see it as a simple supply/demand dynamic. Japan did not have the baby boomers who were pouring savings into the market. Thus when their PEs reached very high levels the demand was not there to absorb the supply. In America we are blessed with high demand, thus, higher PEs are justifiable. I will become a market bear when the baby boomers get about 7-10 years older and look more to fixed income securities. Gold bull then. The baby boomer argument is my main backdrop to my optimism. I must admit the optimism was tested and I am not as optimistic as I once was, but that just means a 15% annual market move is going to have to suffice. The baby boomers have traditionally been spenders, thus creating the ever important cash flow. Any business person will note that without cash flow you are in trouble. The habits of spending will be very difficult for them to alter. Old habits die hard. There are several other factors in which we differ from Japan. Banking, international trade, natural resources. It is a bad comparison IMO. ht david

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