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To: Oeconomicus who wrote (4696)	12/18/1997 3:16:00 PM
From: Eric Klein	Read Replies (1) \| Respond to of 27307

The only reason, IMO, that the market hasn't sold off more is the overwhelming desire among many investors this time of year to defer gains to the next year. What will hold the market up come Jan 2? I agree with that. Just as the '97 losers took more hits to lock in losses, the big winners will be hit at the start of the new year. IMO a number of factors are coming together at the same time: 1. Declining Earnings Growth - Earnings growth for US companies is showing weakness. Many now projecting 9% versus earlier 14% earnings growth projection. See today's WSJ. 2. Falling Stock Market Liquidity - There's a good article in this week's Barrons. Anybody who doesn't agree with this statement should read the Barron's article before biting my head off. 3. Asia Problems 4. Capital Gains Tax Changes - Investors have been holding off taking profits until 1998. The last time Cap Gains Tax was cut, it caused a decline in stock prices. Could happen again.

To: Oeconomicus who wrote (4696)	12/18/1997 3:17:00 PM
From: fut_trade	Respond to of 27307

<<Interesting theories here and at AMZN about an earnings rally. A few days ago all we heard for the market was "year end rally". Looks like a lot of people decided not to wait 'til January to sell, trying to sneak out early to beat the rush.>> The YHOO rally already happened. Your statements can work in reverse as well -- taking a tax loss on a YHOO short before the end of the year! As far as selling on January 2 -- it won't be by the Chief Yahoo!s, Softbank, Sequoia, nor Fidelity. Sequia does sell a few blocks per quarter, but not more. Peter