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To: lin luo who wrote (143762)	10/4/1999 12:33:00 PM
From: edamo	Read Replies (1) \| Respond to of 176387

lin luo....ot ot ot "underlying process change" all one has to do is to look back thirty years, and see that on a good day, the total volume of all shares traded on the nyse was about 12m. today, 1b is not ludicrous. the tremendous liquidity, along with the gross amount of outstanding shares of large cap issues, has created a commodity mindset in the equity markets. the old warren buffet, ben graham tenet of buy the fundamentals, and the stock price will appreciate does not always hold true. when "shares" are viewed as a "commodity", then the short term mentality takes hold, and the "investor" buys into the "shares", not the underlying company. this is typified in the turn over ratios of all mutual funds.fund managers can only reap personal remuneration by taking profits on a quarterly basis. the mechanics and motivation of the fund managers cause choppy markets. i would tend to agree that what you call long memory does not impact the true value of a company, whereas short memory whipsaws the "shares". correct me if i am not understanding your definition of memory using the above as reality in the markets, i conclude that most stocks will trend up, but in a very saw tooth manner. buy and hold still applies, providing one is not forced to exit at the wrong time. i subscribe to options strategies on underlying issues in my portfolio to even out the jagged nature and illogic of current markets. don't think things will change for the better, more exposure through media, increased liquidity via additive retirement plan funding, ease of trading via electronic means, low commissions....all mean increased volatility... comments appreciated..ed a.