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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (14233)	2/17/1998 6:51:00 PM
From: Jack Clarke	Read Replies (2) \| Respond to of 18056

Bonnie, >>If the S&P is the new financial standard replacing gold, then housing, utilities, food, etc, costs less than half of what it did three years ago in S&P units, so does this constitute deflation? It's an interesting concept. One's worth is measured not by how many dollar bills or gold coins he has, nor by his house and land, but by how many units of the "stock market" he owns. But couldn't this concept be applied equally well to the market tops of '29, '69, etc.? After those markets returned to more normal historical valuation levels, the owners could not exchange their units for as many goods and services as they might have at the top. But one must sell those stocks or funds in order to be able to exchange that value for goods and services, which still require greenbacks or their equivalents. No one I know of can trade shares of a mutual fund directly for a new BMW. So what happens when people start selling their funds to reap the benefits? With a relatively declining population, to whom will all these "long haul" investors sell? Since their high PE stocks pay little or no dividend, they can't live off the dividend income and therefore must liquidate the equity for cash in order to use it. And can everybody really be rich? Sounds wonderful, but I remain skeptical. And Bonnie, are you going to change your last name to Bull? <g> Jack

To: Bonnie Bear who wrote (14233)	2/17/1998 7:40:00 PM
From: Mike M2	Read Replies (2) \| Respond to of 18056

Bonnie, those arguments may sound convincing based upon recent market behavior but i see them as "new era" rationalizations for the most overvalued mkt in U.S. history. The man in the street should go public if he can because "even a turkey can fly in this windstorm" or stay in cash and consider Rydex Ursa or Bearx in the near future. I am not saying the dow cannot hit 9000 in a month it is the inevitable decline that concerns me. I also agree with Jack's comments. Mike