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To: GraceZ who wrote (264893)	10/28/2003 11:03:25 AM
From: Don Lloyd	Read Replies (3) \| Respond to of 436258

Grace, An excellent post. Indexes on the other hand are dynamic, they are adjusted to include the new successful and throw out the failures. They are self healing. That brings up the question as to which investment portfolio would give better results, one in which you only buy the stocks which are added to the index, and one in which you only buy the stocks that are deleted. Regards, Don

To: GraceZ who wrote (264893)	10/28/2003 3:11:20 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Good grief guy, this goes against what every bear on this thread has been saying for years, that we're drowning in a sea of debt. Which is why I propose to say it. Perhaps new understanding will result. <g> I read today that the poor Canadians, whom happen to have a trade surplus and appear in good fiscal shape, with a nice positive networth, now have a personal debt to GDP ratio in excess of 100%. And it has increased steadily during the last decade! nationalpost.com The working theory states that savings from places like Asia need a home, and thus there needs to be someone somewhere willing and able to take on debt. Perhaps the G3/G7 world are the most suitable creditors. An article I happened on by chance this am, suggests that may be because of property rights/clear titles less available elsewhere, making it more difficult for citizens of developing nations to take on debt, thus serve as a sink of savings: imf.org [edit] previous article not fully digested yet...

To: GraceZ who wrote (264893)	10/28/2003 3:43:07 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Trading doesn't add a dime, it just shifts the money from one group to another. Agreed. Investing on the other hand benefits from the growth of the underlying enterprises. By 'investing', you can mean something beyond the limited world of public financial instruments. I would propose that the stock & bonds of the world are a limited subset of the world of investing. Faber pointed out a natural underweight developing/emerging markets in the equities market, underweight where the most extensive growth is currently taking place. If you accept this assertion, then I think it follows that 401k money has no effective route to participate in that growth. gloomboomdoom.com Your reply suggests agreement that 45% per annum returns in something called 'private equity' would not be out of the ordinary. It is my understanding that the exit strategy for 'private equity' is the share market, or buyouts. Again, I see no effective route for 401k money to 'private equity'; rather 401k money funds the 'exit strategy' indirectly for 'private equity'. Are these cases of potential future investment returns not available to 401k investments? Might we not say that 401k investments are limited to a subset of the investing universe, a subset with lower returns? [Edit: I see reading a bit further in your reply, you address this, and perhaps concur] To make an assertion that people can no longer benefit from investing in the stock market you'd have to make the assertion that we will no longer see growth. No, I'm just suffering from the onslaught of negativity, which creates a not so pretty picture. Greider, 'The Soul of Capitalism', Maudlin's piece last week re the 'real' vs nominal historical returns, the ongoing revelations of 'leeching' wealth from MegaCorps by WallStreet & insiders... What I think I see emerging, is a dysfunctional pattern that suggests the middle class are funding large marginal enterprises that have little to no organic growth. Rather, they grow through mergers and acquisitions, which often as not destroy wealth. If this picture is accurate, then a large and growing source of funding will continue to support 'absurd valuations' as the machine continues to destroy potential wealth.