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

To: KyrosL who wrote (51407)	5/20/2000 7:34:00 PM
From: Whistler30	Read Replies (3) \| Respond to of 99985

Kyros; You make some rather interesting assumptions about human behaviour but I'm not so sure - especially if one takes the long view. The average person knows they do not have enough funds for retirement now and they will never be able to achieve that goal at 6, 7 or even a 9% return. That may not be rational thinking but I think it's probably pretty prevalent. IMHO the stock market boom (apart from the irrational exuberance of October to March) and the resultant inflation of PE values is not about technology, manias or Alan Greenspan - it's primarily about demographics. Forget about this blip in interest rates and the business cycle - over the long term the composition and economic behaviour of the population are the most important determinants of the price of money and equities. Demographics tells us that the savings rate will increase as the bulk of the baby boom bulge moves into their forties - this means more savers, less spenders, and a decrease in the price of money and interest rates. The effect on stocks goes without saying. In the last half of this decade when the "boomers" start to retire, the money will start to leave the stock market as was the case in Japan in the mid 80's - but IMHO it will fizzle out rather than take a dive. Regards, Whistler