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 : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: KeepItSimple who wrote (2229)	12/25/1999 2:25:00 PM
From: Dale Baker	Read Replies (1) \| Respond to of 3543

As long as money continues to pour into the market faster than new issues are created, a flatline scenario is unlikely. The 510 new IPO's in 1999 probably created about 2 billion new shares at an average $15 apiece, or $30 billion of equity to soak up. How much new money went into mutual funds? I don't have an exact figure but I suspect it was much, much more. You have to break the new money cycle by showing that the market is an inferior return compared to alternatives. And the constant money flow into the market almost guarantees you won't break the cycle. It may turn out to be a largely self-sustaining Ponzi scheme as long as the overall economy doesn't tank. The current working generation will always turn to the market to build retirement savings. Do you think they will turn to savings bonds, munis and CD's? Sort of an evergreen tulip, a variation on the theme.

To: KeepItSimple who wrote (2229)	12/25/1999 6:24:00 PM
From: nihil	Read Replies (1) \| Respond to of 3543

It isn't going to happen. Any time the market tanks (as in October 87) the Fed just pumps in liquidity and off we go again. You see economists understand how to make the economy grow all the time, and the monetary authorities (now all economists) have the independence to make the economy grow all the time ("We're all Keynesians now!"). As the last few suicidal self-punishing haters of growth die off, the growth of the real money supply approaches the real interest rate and the world takes off on steady sustained growth. International trade grows faster and the return to capital inches up. But it is true that bull markets and bear markets don't matter any more. Its a stock-pickers market. When you can easily find stocks that grow EPS at 30% or more for a decade or more, there is no excuse for being poor. These horses drag the indexes along. If, occasionally, one of them breaks a leg and must be shot, too bad. One should diversify, hold at least three of four stocks. Just use trailing stops -- you aren't selling, the market makes the decision for you. Oh, remember, no one could have invested $1 million at the top, everyone was already fully invested. If they'd had stops in (August 98) and didn't buy back until the market bottomed (October 98) they would have done as well I have (>200 %) in the last year and I am very conservative investor. Buy and hold does not mean hold until the company collapses. It means hold until it is highly likely that each company will tank. Poor Buffet's ("never sell") former good luck will ruin many people. His favorites are really turkeys. How can Coke, a flavored sugar syrup, from which the eponymous drug has long been banned, continue to increase in value when its monopolistic practices are being struck down most everywhere? The secret of successful buying and holding is to know when to buy (at least 12 months ago) and when to sell (at the top).