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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (40323)	2/15/2000 6:25:00 AM
From: Crimson Ghost	Respond to of 99985

Gersh: Excellent post!

To: Gersh Avery who wrote (40323)	2/15/2000 7:01:00 AM
From: dennis michael patterson	Read Replies (3) \| Respond to of 99985

Gersh, I buy good stocks. Over time, this makes me money. The rest of this stuff is noise. It really is. I have owned Csco for years. You know what that has done.

To: Gersh Avery who wrote (40323)	2/15/2000 8:33:00 AM
From: Roebear	Respond to of 99985

Gersh, Is this some of the L$ that will be disappearing? An excerpt from Don Hays: *** The growth of margin debt has been unprecedented. For example, in 1998 it grew by $13 billion. That was swamped in 1999 as it grew by $90 billion, with $23 billion in December alone. Margin debt is now up to $228.5 billion, which amounts to 2.41% of GDP. A decade ago the main concern was that we had changed to a workforce of hamburger flippers, but now obviously the ?flipping? has changed to another pastime. When you compare this margin debt to another period when ?excesses? were considered ominous, in 1987 the margin debt to GDP ratio was only 0.9%. Now how much of that margin debt was put in the hot technology stocks do you suppose? But we certainly can?t leave out the corporate investment pools. In the last few weeks as 4th quarter earnings were released it became very clear that big business has turned its main focus on joining the margin traders. For instance, Oracle announced that they had made 500% on their $100 million investment pool last year, and were adding another $400 million to the pot. Microsoft and Intel currently have $19.8 billion and $8 billion, respectively, in their investment programs. As a result in the latest reports, it can be seen that 2/3rd of Microsoft earnings gains were a result of their investment results. It is not just the technology giants that are playing this pyramiding game. For instance 40% of Chase Manhattan?s earnings came from their investment results. Wells Fargo reported $650 million from that source, and Delta Airlines made three times as much from their Priceline.com investment than they did flying airplanes. *** As to margin: Here's an anecdote from main street USA, one of the "No Fear" generation traders where I work lost, in one week, more than the value of my entire portfolio when his Net dropped steeply awhile back, and was still showing a profit (bless his pointy little head)! We are talking mainstream work force and young here, not a suit or financial type. As to corporate investment: Now somebody pinch me, either I'm dreaming or having deja vu, wasn't this one the primary criticisms of the Japanese marktet when their bubble burst; that their companies had invested too heavily in other companies stock??? I look forward to any additional particulars you have on liquidity. Great post. Best Regards, Roebear