Silicon Investor (SI) -- The First Internet Community

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.

Non-Tech : Dorsey Wright & Associates. Point and Figure -- Ignore unavailable to you. Want to Upgrade?

To: Tommy Dorsey who wrote (674)	10/5/1999 10:50:00 AM
From: bill meehan	Read Replies (1) \| Respond to of 9427

Tommy, hope all is well. Don't know if you saw current Business Week, which had an interesting tidbit (p. 42-42) about individual investors that I referred to last night: I didn't get around to reading Business Week until yesterday, but I was intrigued with a piece noting a JP Morgan study that found American's put more money into tangible assets (SUVs, boats, houses, etc.) than into financial assets in the first six months of the year. That was the first time since before I was in kindergarten that's happened. And why not? Much as companies have used overfunded pension plans to juice earnings while borrowing money to buy back stock to cover stock options and enhance EPS growth, individuals have also found comfort in tapping retirement plans and borrowing money to live high on the hog. Yet, believe it or not, there are still many economists that have yet to find "direct" evidence of the so-called wealth effect. So, individuals have been liquidating stocks and corporations have been net buyers, but not enough to absorb all of the supply. And the cost of corporate borrowing used to retire stock has greatly increased and appears to be heading higher, so it won't provide as much bang for the buck. That's where the deficit comes into play. Overseas investors have recycled part of their huge surpluses as big buyers of corporate debt and US stocks, and with the dollar on shaky ground foreign investors may also lose some of their appetite for our paper.