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To: BelowTheCrowd who wrote (165777)	6/4/2002 6:59:40 PM
From: Ali Chen	Read Replies (1) \| Respond to of 186894

mg, "That makes your assumption of 12% "regular growth" somewhat suspicious." Yep. Tench and Kap already pointed my mistake. "What numbers would you get if you assumed THAT to be the "real" trendline? Not saying I necessarily believe it, but I find your assumptions somewhat arbitrary." I must admit I am fully ignorant in financial/economical sciences. But while looking at the historical SP500 data, especially in log scale, few things captured my attention. In recent rallies, 84-87 and 95-99, the compounded rate of SP500 return was interestingly similar: 2x in 3 years, or 26+% yearly. During relatively quiet periods, 89-94, and maybe 78-83, the slope corresponds to 8%/year. Based on the most recent trend of 89-94, the SP500 must be about 900 today. I think the most recent trend is more likely to define the bottom, since I believe that the market system is a system with memory (in every meaning) - old matured investments I think are less liquid than more recent (and especially bubble-acquired). But what strikes me most is that for all those periods of several years long the SP500 grows was exponential, meaning that the stock market is always in a free (rise or) fall, until it hits something like energy crisis, AG, or whatever. I am certain that there are experts who know how to model non-stationary systems with memory using integro-differential methods, who could explain all this. - Ali