Lee- Following up on your point..What is becoming abundently clear (obviously) is that, in addition to interest rates, liquidity (demand) and supply (not only on an individual basis, but overall in the market) is having an enormous effect on stock price appreciation, and, additionally, valuations (P/E) in this market..
On the supply side, Look at all the buyouts in the past few years...taking shares out of circulation....and, I believe, that the IPO market was pretty much bone-dry for a few months this summer (leading to an overall slow year)....So, it sounds like supply (new IPO shares, stock in circulation) has decreased (or at least not keep paced with the increase in demand)...
Of course, we all know about the limited supply of shares (for internet companies)..and what that has done to those share prices..
I guess the thing to figure out is when is this party going to end?
(Most of what I've read says) that we are due for another 6-7 years of high inflows due to baby boomer retirement...Would like to hear your thoughts..
Obviously, there are other factors as well...Foreign money...ebb and flows..but looking at larger trends....Europeans are just starting to buy stocks...although one may expect that their total % of stock ownership may be lower than the U.S. for the forseeable future (more conservative)...undoubtedly there will be some rise in overall demand (all things being equal) due to their INCREASING commitment to stocks and, by definition, U.S. stocks..
Also, what about continuing increases in wealth in second/third world countries....the availability of these folks (as never before) to invest in U.S. equities...I feel certain that more citizens of these countries are looking at equity ownership (vs. 10/20 years ago)...
Benefit for U.S. stocks?
So, in a lot of ways, one could feel bullish about demand for U.S. equities (and equities in general)...
Finally, the entire process (researching companies, buying stocks, etc.) has become so much easier in the past decade...So much easier for a Bolivian to monitor their U.S. established E-Trade account from La Paz...
I would love to read a comprehensive look at all these issues...I have failed to see the investment press devote a lot of time focused on these issues....In my mind, underweighted in the whole discussion....
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