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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (39048)	6/13/2000 11:50:00 AM
From: Augustus Gloop	Read Replies (1) \| Respond to of 63513

Really glad to have you here Dave. For those who don't know Dave, he has a great mind and comes from a superior school of education.

To: LLCF who wrote (39048)	6/13/2000 12:06:00 PM
From: Original Mad Dog	Read Replies (1) \| Respond to of 63513

don't you think there is any chance that the 'reverse wealth effect' could cause some real problems in the economy at this time?? Well, that is a possibility, but I think the underlying strength in the economy will save the day. The real engine of sustainable economic growth is not equity prices; it is productivity, which at the moment is being driven forward relentlessly by a combination of amazing technological innovation and friendly medium-term demographic trends. Equity prices are the tail that sometimes wags the dog too quickly, causing him to become hyperactive and excitable (and correspondingly causing his wife to spend too much money, which in turn causes the Fed to raise rates). What I am trying to say is that this is merely a speed bump, not a bridge collapse. The economy will pause, and as long as the Fed doesn't get too vigilant it will languish for a couple of quarters of only moderate growth. Quarter over previous year's quarter comparisons for some companies may not look too good for a few months. But then things will continue to march forward, and the selloffs that accompany the earnings warnings will appear, in retrospect, to have been golden buying opportunities. I am not particularly bullish in the very near term, BTW, and am currently more than 30 percent cash equivalents. But later this year I plan to deploy all of that cash and maybe more, going on margin for the first time since late last Summer. MAD DOG