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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: 16yearcycle who wrote (32843)	10/17/1999 10:12:00 PM
From: Gottfried	Read Replies (2) \| Respond to of 70976

Eugene, re >I just wonder if AG realizes he may have said a bit too much this time.< I'm sure he does if he reads his mail. :) G.

To: 16yearcycle who wrote (32843)	10/17/1999 10:50:00 PM
From: Big Bucks	Read Replies (3) \| Respond to of 70976

Hello Gene and all, A comment or two about opinions/arguments expressed with so much emotion recently. There is nothing wrong with being cautious about preserving the outstanding gains made over the last 12 months. The markets have topped out for now. Short term upside potential doesn't outweigh short term downside risk, IMHO. Whether we want to admit it or not inflation is here and the FED knows it. Oil prices are up, gas prices are up, real estate prices are up, airline fares are up, car prices are up, gold prices are up, meat prices are up, chip prices are up, consumer debt is up, etc, etc, etc. The trade deficit continues to go up since American made products are becoming more expensive to depressed economies and US companies must compete with lower international wages/manufacturing costs which limits international sales potential to US companies and further pressures US manufacturing to reduce output. The markets have topped based on very few participating mega-corporations while the majority of small and mid-sized companies have floundered over the last year or so. The money flow into US markets is reversing course and is looking at other world economies/markets that have better upside potential as they recover from the severe "depression" that they have been suffering from. The "allure" of foreign money into US markets has waned due to the "over-valuation" of the largest stocks which have become too expensive relative to their potential short term gains. Some would say that better values exist elsewhere in recovering world markets/stocks that will double or triple in value in 1-2 years, barring any setbacks. Not many US companies can expect this kind of performance except for high tech manufacturing and service oriented US companies that will sell to these re-emerging "Tigers" as they invest for future growth to compete against US companies at a lower manufacturing cost basis which will pressure US earnings/margins going forward. In order for the US markets to continue to grow there must be a broad based participation from the small and mid-sized companies that have languished this year. This is difficult to do when interest rates and prices are going up. The Fed is playing a "Shell game" with the markets until next year (after Y2K) since it is an election year. I suspect that they will lower rates again starting in late Spring to "stimulate" the economy going into Summer and Fall, expect a market upsurge then. For now maybe it is better to be a bit cautious and conserve capital until better values abound. Just my opinion, BB