Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (897)	1/29/2001 3:06:03 PM
From: GraceZ	Read Replies (1) \| Respond to of 24758

It's funny that you bring up JCP as an example. I think if you look at their financials you'll see that the decline in revenues and profit for that company started back before the NAZ hit 5000. In other words, while the wealth effect precipitated by the stock market was still very much in force.

To: sea_biscuit who wrote (897)	1/29/2001 3:28:32 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Apparently so. When JCP peaked in early '98 the wealth effect was in full gear and continued for at least two more years. Now that the wealth effect is over JCP is starting to rally. But I wouldn't hang too much on what an individual company has done. The wealth effect has nothing to do with corporate profits. They are merely coincidental. Indeed, the wealth effect lags expectations for changes in corporate profits which stock prices reflect. This is definitely what is happening in JCP and many others. What you have in mind which is the core problem is that monetary authority should respond to what has happened in the past. This is what they do too often and it's disastrous. People only want them to pump in the dough to bail them out from the failure of their past greed. The FED can't do that because the result of the bailing, wouldn't do that, but it would create a far worse situation. You aren't old enough to understand that. You'd just get more greedy, as would everyone else, and then circumstances would arise that would send you into the Stone Age. And everyone else.