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Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (59031)	6/29/2002 5:04:42 PM
From: Joe Stocks	Read Replies (1) \| Respond to of 208838

Chris, Harry Dent writes a good book back in 1993 called "the great boom ahead". I think it is a must read for anyone that invests in the market. I have heard it said if one could have one tool to pick investments for the future it would be the knowledge of demographics. Dent's book gives a good foundation for using demographics to predict future trends and occurances. Then Mr. Dent wrote a book in early 2000 called "the roaring 2000's". By then he got caught up in the mania and changed some of his views. The second book is trash if you read the first. Here is a review that seems to agree to a degree. rehphome.tripod.com I was telling people to get out of the market in 1998. Did I look bad in 1999 and early 2000. I thought values were to high but I never would have thought the Fed would pump up liquidity as much as they did nor did I think they would bail out LTCM. If they would have stood put we would had a nice little "big" correction, the dot.com excesses would have been wrong out before they reached there later more absurd valuations, and we would have been back on the road to seeking out real value in good companies. Based on demographics I thought we would have a nice, robust economy until 2006- 2008. But, Greenspan put the "greenspan put" in the mind of the investor by his constant bailing out and we were off to the moon because the Fed would always be there to support. Well that support only goes so far and the fall was just a matter of time. Back in January 2001 when the Fed starting to cut rates the mantra was "don't fight the Fed". I very publically said it was different this time and have been bearish since. So much so that on the board I came from at AOL I was well know for my extreme bearishness. Not that I want to be bearish. I just think that is where we are headed. In 2000 I also posted that if we did not see some fear come into the market soon and see a drop in the market to it's knees, that the public would become too complacent as they awaited Greenspan to come in and save the day as he had done now several times. If the "crash" did not come quick we would see the crash in the form of many "paper cuts". The problem with this would be that the common investor would continue to stay in the market with their portfolio dieing a slow death. This type of fall would create more discouraged investors nearing their retirement years that may not return at all. I think we are seeing that now. Therefor I am a firm believer that we will not see great returns for a number of years. As I said earlier, possibly 20 to 30 years of lean returns. Back to demograhics, the main force of the baby-boom was a surge in births from 1950 to 1957. Supposedly the average person moves into their most expensive home at 43 years of age. The average person is their most productive at about 46 years old with their incomes and soending peaking around then. Those that were born in 1957 turn 46 in 2003. About the time you were saying to get out of the market. From pure demograhics, that was probably good advice back in 1998 when you mentioned it. If you look back at that 43 year old buying their largest home that would put the year 2000 at the peak if one calculates that the end of the birth surge was in 1957. If you recall, 2000 was a very good year for homebuilding stats and 2001 started to show slowing. What did the Fed do, they promoted the decrease in credit quality to a whole new population of buyers to new home ownership. The natural scheme had been foiled again by government intervention - another bubble was born. Right now I'm really upset about how our government has not taken on more fiscal responsibility. The bearer of "irrational exuburance" is now the father of it. I have a very dire outlook for the future of our economy currently. Personally I have my retirement accounts and a couple of other accounts I manage nearly completely out of stocks and mostly into treasuries. Joe Joe