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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (1)	4/18/1998 6:56:00 PM
From: dealmakr	Respond to of 3339

Roger, I happen to agree that the present era is a time of great change. Technology growth is moving at an ever faster pace. This bodes well for a truley global society and economy as information flows fast and free. As for your points, a couple of thoughts. 1. Yes there is more peace in the world with a lessening of cold war tensions. I do think that it is a more dangerous time in other ways however. The possibility of some terrorist or criminal organization causing an event that could wreck havoc with the financial markets should not be underestimated. You don't have to have a massive budget to obtain the desired result. 2. Interest rates are funding much of this expansion in the stock market. Debt levels though by the average consumer are at a very high level. Bankruptcies by those same consumers are at historic highs. Derivitive exposures by major financial institutions also at unheard of levels. I don't understand a lot of those structures, but have read that the losses can be horrific. 3. Agree 4. Energy costs are low now, but fossil fuels are still being depleted more rapidly than replaced. A shortage could develope quite rapidly if OPEC and others slow production to firm pricing. Don't know if they could ever consolidate enough to do this though. Also events occuring in the major oil producing areas could have a negative effect. 5. Agree I do think that the market is in a bubble formation with the internet stocks leading the way. What it will take to pop the bubble as yet remains to be seen. Whatever happened to investing in companies that have reasonable PE's(and earnings). I do think that by looking at the past histories of these events you can possibly discern one taking place. I hope to be in a position that is advantageous when it pops. Smelling the tulips Dave

To: Roger A. Babb who wrote (1)	4/18/1998 6:58:00 PM
From: Shoe	Read Replies (2) \| Respond to of 3339

America's Bubble is cover story for The Economist (link): economist.com Re: Stock market overvaluation, see dismal.com Your "contrarian" might want to read dismal.com wherein the author argues that 1997 was as good as it gets for the economy (if not the stock market). -- Shoe

To: Roger A. Babb who wrote (1)	4/23/1998 2:45:00 AM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 3339

Roger, 1. The relatively low military spending is only low when looked at on a post-war basis. If you consider the pre-war period, you would find that military spending exhibited a similar pattern in the 1920s, leading up to the great depression. Historically, wars have been pretty good for the economy Your point that we are headed to a single world economy is well taken. Up until the point when that 34% increase in Asian imports starts being felt, workers start losing jobs, and all of a sudden the world isn't one big happy family anymore. In fact, I'd consider "political action to stem the increasing Asian trade deficit" to be one of the likely candidates for pushing markets down. 2. Interest rates and money supply don't always go hand in hand. Adjusted monetary base growth has been slowing. In fact, it's pretty flat this last month. And there's talk of interest rate rises. 3. True, in so far as it goes. But this doesn't necessarily create the level of profits necessary to sustain the market at these levels. A big part of this bubble is due to the "concepts on the verge of becoming commercial." Some of them never will become commercial, and some will only enjoy moderate success. You can't value the market on the assumption that every new concept is going to work and grow boundlessly. 4. The available unused oil/gas prouction capacity is at an all time low. There is virtually no cushion in case of a disruption. A minor problem anywhere will immediately be felt in the world supply, and a major problem could leave us wishing for the relatively good times back in '73. 5. Not sure that this matters for the stock market, except as a contributory factor to your point 3. mg

To: Roger A. Babb who wrote (1)	8/28/1998 10:37:00 AM
From: Terry Whitman	Read Replies (1) \| Respond to of 3339

Wow! Never seen this many posts on the "bubble" in one night. Took me 20 minutes to read everything. Some great commentary out there, some name calling, lots of smug bears and a few angry bulls. A few comments FWIW: Yesterday's action, to me, confirmed a genuine bear market. This did not surprise me in the least. I'm a student, and believer in technical analysis, and TA has been calling for a bear market for the last 3 months. I will also not be surprised to see a "technical bounce" rally over the next few weeks. This bull has been very, very good to alot of "investors", and they can't imagine the party ending. Unfortunately, the average investor doesn't recogniize a bear market until the bear is 2/3 over, and doesn't make a move until even later. Which brings me to an old trader's law: "The longer a trend has been in place, the riper it is for reversal." This bodes well for the future of gold, Bobby B. I don't consider myself a trading(or investing) guru or anything- but if you're going to be in the market, you HAVE to know what the primary trend is- or you shouldn't be in it. Good luck to all, TW

To: Roger A. Babb who wrote (1)	12/31/1998 12:55:00 AM
From: Lachesis Atropos	Read Replies (2) \| Respond to of 3339

The pin that pops the bubble?--Expecting the unexpected Just thinking out load about what could be the most possible scenario to turn this market around. I think a very likely scenario would be if one the companies in the Dow defaulted. Not many manufacturing companies are in good shape these days. On the least expected side is a company like Micron; though not expected it is possible. Any other musings are welcome. Lachesis