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

To: Raymond Duray who wrote (15220)	2/19/2002 2:37:20 PM
From: carranza2	Read Replies (2) \| Respond to of 74559

I somehow thought you'd suggested that shorting was viable in a 401(k). It's clearly not. Writing covered calls on an IRA is about as far as is allowed. But I do agree with you that the speculative bubble of the late '90s may have been caused at least in part by too much money chasing too few securities. The enormous growth in both the size and number of mutual funds is a good indicator that this may have been the case. With monthly inflows often exceeding $10bn, the funds had to do something with the cash. They bought, bought, and bought some more, regardless of the quality or intrinsic value of the underlying security. In that kind of atmosphere, it was inevitable that stocks became overpriced.