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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (218)	4/5/2000 8:17:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

Index investment was the craze of yesteryears. S&P 500 index rule the world. Buy index funds and you make money. Not true anymore of S&P 500 index. Its been flat. The index stock are of good value, but the growth is dependent of population growth and population growth has been only around 2%. Now investors think Nasdaq index is the companies to invest in. Technology and whatnots? These stocks became technically inbalanced. New market making requires the wide or wild spreads to cover the losses in their costs of short interests. Price of stock becomes sky high. Profits from these stocks by margin buys more other stocks. Is 1929 far away? Greed and fear does not work anymore? It is because money from the new economy is everywhere. Large IPOs which would have solved the excess demand problems. Now creates a run on the bank, to get out of fully invested portfolio to buy new issues. Mini or later major crashes will happen if not soon? Federal Reserve bank's interest policy made the cashing in on the stocks, a run on the banks, a reality. Foolish acts of little men thinking they know Wall street. How do we control indexes? How did we control S&P 500 indexes? Decouple futures gambling from the market makers' scheme of things. Balance of power is in the hands of market makers, futures traders and the government. Big fish in a small pond gets nailed.