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

To: Psycho-Social who wrote (71435)	3/7/2001 4:03:29 AM
From: jmootx	Read Replies (1) \| Respond to of 99985

psyocmarper Very astute analysis. There are a few things for us to consider. The very text of your opinion relates to Japan today. That country, like the US in the 1930's believed in isolationism. It is so rooted in the very heart of over 2000 years of Japanese culture to not trust or allow outsiders to settle and mix with traditional folk. Big economic PROBLEM !! You are right as well with the U.S. culture. But there is two solutions: One is that the Baby Boomers did produce 60,000,000 well educated offspring, still not enough to counter the 70,000,000 Boomers born between 1946 and 1964. The hyped projections were that this was not going to impact the market until 2004-2007--ohhh well wrong on that one. The other key is that the U.S allows immigration especially from Latin America. So far this movement has been incredibly productive. The key is the productivity--Greenspan contributes a lot of it to technology, but I say he is missing the great work those from Latin America contribute to our economy. The big key to the length of the bear market is to allow open immigration like in the early 20th century. This should somewhat cushion us from a real hard landing until the Gen y crowd reaches maturity. The benefits of low interest rates should convince most Boomers to hang on to the stock market, but nevertheless they will diversify. This is part of the puzzle as to why I think a 5 to 7 year trading range is in order for the U.S. markets. Foreign investment still likes the U.S. since Europe and Japan still can not grasp the result culture we have instilled. So for now the balance hangs in the hands of U.S business leaders if you ask me. Can we keep up the productivity ahead of everyone else??? Is it a turnip we are squeezing dry or simply a business model as revolutionary as the the cotton gin was for technology?? It is still a mystery, but my bet is on the U.S for the immediate term. jmootx

To: Psycho-Social who wrote (71435)	3/7/2001 1:05:24 PM
From: lurqer	Read Replies (1) \| Respond to of 99985

believe this period is comparable to 1963 Like you, I consider both demographics and sentiment in formulating my market view. I believe the broad secular trends are demographically driven - e.g. the secular bull from '82 is an attribute of the Boomer Bulge. One way to measure long term sentiment is to consider average market p/e values. It is my belief that as a secular bull unfolds (and "buy the dip" continues to work), p/e's expand. They finally reach unsustainable levels and pull back. Still being supported by demographics, this p/e pull back is significant, but not radical. The radical p/e compression occurs later when a demographic trough triggers a secular bear market. From the above hypothesis, the resulting market behavior is that a secular bull spikes to a manic top, pulls back a little, and then puts in a broad range bound top before declining. I believe '66 was such a top and the serious p/e compression started in '72. If '00 is analogous to '66, we may have a largely range bound market prior to the beginning of a secular bear beginning in the second half of this decade - again triggered by a demographic trough. Like you, I'm not saying we'll follow each twist and turn of that period. But "past is prologue" and "history rhymes". lurqer