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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (23710)	5/29/2000 9:07:00 AM
From: Gersh Avery	Read Replies (2) \| Respond to of 42787

Hi Dan OK .. I thought over what you were saying. First I'd like to say that I'm a bear. I think that the market is pretty much a con/shell game intended to take the most money from the most people. However there are times that money can be made on it. Wall street is a machine that sells stock. They teach people outside of wall street to buy stocks and never sell then. Who makes more money? If buying and holding stock forever was really the way to go, do you think that you would even be able to buy any from them? To me the market represents a set of factors. Supply and demand, the value of the dollar, the perception of value (mass psychology), available cash (liquidity). When the market has bad times, companies that have very good earnings can still develop very low stock prices. Companies that have pour earnings go under and stock holders loose everything they have invested in them. I thought that I'd pass along a link to this thread. #subject-22518 Have you heard of Bob Brinker? I thought that this fellow was a perma-bull. He had been 100% invested in the market for many years. Several years ago he started to pound the table about Microsoft and made himself and his followers a good chunk of change. He went long very near the bottom in '87. In early January he told all the folks that follow him to go to 60% cash. He is now telling his folks that there may well be a "counter trend rally." In other words, this fellow that I'd mistaken for a perma-bull now says that the trend is down but there is an upcoming, perhaps as much as 20%, momentary spike up. Anyway .. for someone with your time frames and style I thought that you might like to give this fellow a look see. If the entire market were to be represented by the set of available money being thrown at it minus overhead, then the retirement of the baby boomers represents a very high risk. Money has moved into the market. This resulted in very high salaries and bonuses for the wall street gang (overhead). Net result is that the market moved up. However, because of overhead, the move up has not been the total sum of the money thrown into it. In fact, the break even point, just to pay for the overhead, is about $400 million per week. It would take this amount of regular contributions just to keep it standing. If contributions just stopped the market would slowly fall because of the overhead drain. If you add to that money being pulled out to pay bills on a regular basis, you then have a one-two punch that could do some real damage. What's more, as the boomers get closer to retirement age, the nature of the style of investment should change. Gradually there should be a shift into progressively more conservative investment to guard the gains that have taken place. This is not as important for someone who has longer to go. But when retirement is just around the corner, who in their right mind would base their golden years on a casino? So then .. slowing contributions, continued overhead, retirement income pulled out, change in the nature of the baby boomer investment .. That was the picture that I had talked to Don Sew about. This is an oversimplification. The market has many more factors involved in it than just the baby boomers. That said, for the market to continue to move up after the baby boomers start to retire, the market will have to find some other cash flow to replace them or will fall for a long time.