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.

Pastimes : DOW 36000 - Glassman and Hassett -- Ignore unavailable to you. Want to Upgrade?

To: Sid Turtlman who wrote (29)	12/19/1999 8:23:00 AM
From: Clouseau	Read Replies (1) \| Respond to of 42

Sid - another factor is the river of money needing to be put away for retirement, now that defined benefit pensions are being phased out, generally speaking. So that river has to go somewhere, and arguably propels today's market up and up. If the market turns down due to some exogenous event or change in attitude, where do you suppose that river would go? CDs? Bonds? Metals? I figure your answer to be something other than 'conventional wisdom'! And thanks for your willingness to share your ideas on this thread! TIA Dave

To: Sid Turtlman who wrote (29)	12/20/1999 9:14:00 AM
From: noiserider	Read Replies (1) \| Respond to of 42

Hi Sid, <<Who said that bond money is cheaper than stock money? It is not - it is the exact opposite. Why would an internet company want to borrow at a junk bond rate, which would reflect its lack of any prospect of profitability for years to come, when it can do an IPO at 500 times hoped for earnings 5 years hence? >> I think it's important to separate out the current internet mania from G&H's focus on the total market. Agreed - the cost of capital for many internet stocks is zero. But the cost of capital for all the companies in the DOW (and I believe the S&P 500) is not. Further, G&H shy away from internet stocks by saying "Our own bias, however, remains with companies whose earnings we can count-and count on." I gather from your recent posts that your explanation for the stock market rise is "irrational exuberance". You may be right, however, I'm still interested in exploring G&H's theory. "Why in the world would I want to contact a symptom?" To see if they can answer your well thought out objections. I'll let you know if I get a response.