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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Kid Rock who wrote (3381)	5/2/2001 8:22:56 PM
From: FrozenZ	Read Replies (2) \| Respond to of 74559

Great post Kid, it really hits the nail on the head. Everyone knows the valuations are wrong but they have been wrong for years, why is now different? I'm not a stock market wizard but I will guess. Once the bubble breaks it becomes harder and harder to re-inflate it. The fed is doing everything it can right now... cranking up the money supply in a way that's never before been done. American consumers have a savings rate of something like -$40,000 per family (that's minus) so it's getting harder and harder for them to spend their way out of a downturn. Gas and electric prices are going through the roof so that doesn't help them either.There is a certain casino like behavior that markets display as they lose touch with reality, and many people have noticed those behaviors showing. In the end both perma-bears and perma-bulls will be wrong because extreme moves are characteristic of times like these.

To: Kid Rock who wrote (3381)	5/2/2001 8:24:25 PM
From: jim black	Read Replies (1) \| Respond to of 74559

Kid , welcome to our little cyberhome. I have a suggestion for you, maybe a very valuable one. I have followed this thread for months and there is some very good information here. You pose a very astute question in your post, a variation I might venture of "Is it different this time?" I have seen quoted short and long passages of a classic work, i.e., "The Devil Take the Hindmost" and I am now finally reading it. As Jay said to me after he read it in 1999 he began loosening up on his stocks. It is available in paperback from amazon.com and I suggest you will never find a more valuable tome in your investment life. If you choose to run with the lemmings, good luck. But ask yourself why GE, a proxy for the US economy according to some views, is selling at pe of 37, a PE/Growth ratio of 2.02, paying a dividend of 1.3%...and ask yourself if that is the picture of a healthy market...and oh, BTW, answer that question of yourself AFTER you read that book. jim black

To: Kid Rock who wrote (3381)	5/2/2001 9:00:57 PM
From: Mama Bear	Respond to of 74559

"do pensions really exist anymore or is everyone's retirement money in Fidelity mutual funds?" Umm, didn't the pension funds invest their money in stocks? I'm not sure that if you did a statistical analysis if you'd actually find much more retirement money in the market now because of the switch to defined contribution plans. Perhaps less, as many don't bother contributing. When those same people were covered by a defined benefit plan, their company had no choice but to keep investments to cover their liability. Regards, Barb

To: Kid Rock who wrote (3381)	5/2/2001 10:14:24 PM
From: Ilaine	Read Replies (1) \| Respond to of 74559

Hi Kid - you're right - we could very well simply be at a breathing point in the longest boom in recorded history. In 1929, the Fed was trying to kill the stock market boom - not now. 5000 banks failed in the 1920's - prior to 1929. We don't have that. In the Great Crash, from 1929 to 1932, the US market cap of all equities traded on the NYSE went down 85%. We don't have that. We may, or may not, have a recession. We may, or may not, have inflation. We may, or may not, have stagflation. The economy screeched to a halt in the last quarter of 2000. We do know that. We don't know where we are going next. My own nature forces me to only buy shares in companies I like and trust that are selling at a good price and have a good future. I can't do it any other way. Right now, I'm not buying anything.