To: Sig who wrote (5998 ) 2/6/2002 6:17:27 AM From: stockman_scott Respond to 'This Time It's Going to Be Different!' Says the Shepherd Investment Strategist jasmts.com ), says that 1982 was the beginning of an investment scenario created by a combination of circumstances that is unlikely to ever be repeated, certainly in our lifetime. Following a period of high interest rates that were used to defeat the inflation problems of the 1970s, a 20-year decline in interest rates began. This signaled the start of a new bull market, and as interest rates fell, investors continued to refinance and re-mortgage at lower and lower rates. Instead of saving or lowering their debt, they increased debt by buying larger homes, extra vehicles, vacation properties and by throwing money at the stock market with no concern as long as the bull was alive. In the mid 1990s two elements of the greatest investment bubble in history were falling into place as investors discovered internet stocks and Wall Street convinced them that valuations of companies like Amazon.com, Nortel Networks, and Lucent, no longer mattered in the new economy. In 1998 two of the final investment gifts were handed to Americans when the Asian economies collapsed. This led to a massive flight-to-quality flow of foreign funds into our already overvalued equity markets and allowed us to keep spending our new found wealth on even cheaper foreign imported products.
