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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: paulmcg0 who wrote (43430)	9/12/1999 8:19:00 AM
From: William H Huebl	Respond to of 94695

Paul, But in a way he is right... we have seen the BTDers salvage what would be a fearsome sell-off... and as long as that mentality exists, the bubble stays. It's "...the bigger fool..." theory to the max! From what I see, this time of year is the ONLY time the bubble could be punctured as there is enough history of BKs at this time of year that at least SOME of those investors may hold back enough to get a sell-off going. As for me, my retirement stash is going into fixed investments rather than equities... something I will likely change when this weakness is over. (Then it is I who becomes the bigger fool???) Cheers, Bill

To: paulmcg0 who wrote (43430)	9/12/1999 1:08:00 PM
From: Skeet Shipman	Respond to of 94695

Hi Paul, A provocative question.(And one I am unable to precisely answer if one could be given.) Here are my general thoughts: There is always uncertainty about the future, both positive and negative. Foreseen and unforeseen developments will always occur. The way markets discount these effects their valuations. If investors where restricted to holding stocks for twenty years I am confident that market valuations would be different from what they are now. Since I believe market prices are determined by money flows, liquidity, and expectations. Market declines occur when money flows turn negative into the market. Or if and when macro liquidity is severely reduced. Or when the wave surge in optimism turns to a trough of pessimism. (AG's) Implicit in your question are two other questions. Are we in a bubble? And if so how will it end? If you take an econometric model and hold stock market prices to the growth rate of corporate profits or zero, which ever is higher, and the projected GDP goes negative. You have a bubble. Early stage bubbles can end either by a decline in stock prices or by corporate profits increasing relative stock evaluations. Later stage bubbles always end badly. (Note: The discounting horizon effects valuations, as do substitute investments.) (A LOT OF BS) Skeet