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

To: Bonnie Bear who wrote (14242)	2/17/1998 8:11:00 PM
From: Jack Clarke	Read Replies (4) \| Respond to of 18056

Bonnie, >>so I'm getting forced into being a bull in self-defense. Could this be a sign of a market top? <g> I understand what you say, but I just don't buy the "new era" stuff. Old curmudgeon that I am, having been burnt in the "new era" which ended around 1969, I remember stocks being down about 80% over a decade. I won't argue with the current mantra that "this time it's different". I've certainly not made any money being bearish on fundamentals and have indeed lost money relatively speaking. But I'm still in that old fashioned mindset: You buy a stock in a good company. You get a dividend (yes, and pay tax on it). Your money is therefore invested at "interest". You can spend the dividend on living or you can reinvest it. The price of the stock goes up coincident with inflation so that your investment doesn't erode, etc, etc. But nowadays, these "new era" stocks don't pay those horribly taxable dividends; they use their earnings to buy more of their own stock, driving the price up for everybody else, but not accomplishing anything else to make the company really worth more. Stock buybacks increase the price of the stock not the worth of the company. This is just more manipulation, in my view, which "coincidentally" benefits most the CEOs and other employees who hold options. I know this is hopelessly old fashioned. We'll see how things work out eventually. But I do agree that it will be nice when everyone is rich. Jack