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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (83690)	2/21/2003 4:13:03 AM
From: Psycho-Social	Respond to of 99985

Paper on Demographics & Stock Market: Thanks for the link. There is indeed a similarity between my approach and that in the paper. What I did was a kind of reverse engineering - studied Dent's data on Immigration Adjusted Birth Rate vs Stock Market performance and played with different formulas till I found the "best fit". The paper is much more sophisticated mathematically than my approach, but I believe that mass psychology, or more accurately, mass social psychology is an important factor as well. A large generation provides strong buying power, especially when a much smaller generation is cashing out, but there is an additional impetus from the feeling of success that comes from years of successful investing. This causes a higher % of stock ownership, and a higher % of $ to be placed in stocks by the large generation, which adds to the numerical advantage that was the initial cause of the relatively good Market performance. Have saved the paper as a Favorite and will return to study it in the future. There is an intriguing mention re Bonds, which I've had difficulty analyzing via the demographic method.