The Naked Truth - Big Kahuna a Myth Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Naked Truth - Big Kahuna a Myth

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: wlheatmoon who wrote (16271)	1/19/1999 4:26:00 PM
From: yard_man	Read Replies (1) of 86076

>>So what if DOW drops 500 points or 2000 points, they'll keep investing and dollar cost averaging. In the long run, the bulls will win. The bears may be more rational and may make big money on a swift correction--if appropriately positioned in time. There will be no long-term correction. There's just too much money out there. I don't see it changing. There's a ton of jobs out there. Everyone is doing extremely well. So what if the PE ratio is out of this world. So what if many of these companies are not making as much money. Everyone is putting money into the market and there is a new paradigm. We're dead wrong. The market may cough and sputter, but there will be no major depression. << You've ignored that we are living in extreme times as far as consumer and corporate spending are concerned -- it simply cannot accelerate from here. You know the argument -- this has been fueled by the appreciation of financial assets, a failure of these assets to continue to appreciate as quickly will greatly curtail this spending. We have had huge numbers of job cuts recently -- these were good jobs. Others are created to be sure, but not at the same level (benefits & pay). People who are laid off tend to tap these funds when needed, but this isn't the only hoard of money flowing to support stocks. There are foreign buyers and corporations themselves. Earnings are clearly declining on the whole. This means less support from the market by share buybacks, for this money must come out of earnings -- sooner rather than later ... The excess cash you refer to produces malinvestment, such malinvestment sooner or later, regardless with what happens to the market -- will result in declining margins in the businesses affected. Less earnings means less capital investment and this in a time when very large amounts of cash have been put into share buybacks -- for the virtuous cycle, there will also be the destructive cycle. If you want to join the "something for nothing" crowd jump in, but it can only work for a limited time.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next