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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (3244)	9/23/2000 8:26:34 PM
From: freeus	Read Replies (1) \| Respond to of 65232

remoney on the sidelines But we have been hearing that all year: could money stay "on the sidelines" for years and years? Freeus

To: RR who wrote (3244)	9/23/2000 10:31:13 PM
From: adairm	Read Replies (1) \| Respond to of 65232

RR: About that "Money on the sidelines"... The institutions probably do have cash waiting to be invested, and that's a good thing. I believe that a lot of what drove the market up last winter/spring was not real cash but margin! Retail investors who were making money hand over fist were pyramiding up their accounts on margin. And when the spring crash came, and the margin calls came, it's spooked them out. Case in point: I have a buddy who at the beginning of 1999 had about a $2 million account at Schwab. $500K on margin. By the end of the year, he had a $5mil account, $2.5mil on margin! When they crashed, well, he lost a ton of money. He's told me he's "Scared" to get back in. He's still invested, still on a little margin, too. But, he's not extending himself the way he used to. Now, multiply him by 100,000 other guys just like him, and you see the situation. We just don't have the margin buyers we used to have. So, I see a rally, just more subdued this time. The institutions will be playing the sector rotation game. So, I'm watching, and picking my spots. Adairm