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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Dushyant Narayen who wrote (66778)	8/25/1999 3:40:00 PM
From: Freedom Fighter	Read Replies (3) \| Respond to of 132070

DN, Here's my 2 cents. The thing that will stop the bull market is that it takes progressively larger amounts of money being directed towards stocks in order for the market to continue to rise. In general, the amount of money and credit in the economy is always increasing. But if a disproportionate amount of it is being directed towards stocks, they will rise faster than the rate of growth of economic activity and our ability to produce real goods and services. So in order for that to continue, the relationship between the amount of money and credit that will be required to come in and real economic activity will have to continue to widen. Sooner or later all that money will either spill over into inflation, create a current account deficit that's too large to finance or create some other such symptom that will blow it out. And all the while there will be more and more people that recognize the excesses and start cashing in tickets. In addition, more and more of the credit in the system is based on the assumption of a continuation of unjustified capital gains instead of the actual income producing ability of the assets and workers. So merely a sideways moving market for an extended period of time will cause some problems. Wayne

To: Dushyant Narayen who wrote (66778)	8/25/1999 5:22:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

DN, Basically, I have confidence in my valuation model and my ability to forecast reasonable inputs into that model. For the past 3 years, my model has shown the market overpriced and my inputs have turned out to be too optimistic. Yet, the stocks go up. The simple fact is, these are not gambling games, they are cos. Cos. will return something to shareholders over the long haul totally removed from any thought of capital gains. In other words, the discounted value of all the dividends paid. And, using that concept, there is no way the market is fairly priced and tech stocks, though the future is murkier due to technology changes, are among the most overvalued. So, despite the fact that the greater fools continue to jump on, I am certain that someday the stocks will have to be valued as operating cos. and when that happens, the prices will be coming down. Big time. In the meantime, I have a money mgt. system (90/10) that maximizes my gains and minimizes my losses. That means I will be flush when the end game is played.