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To: j g cordes who wrote (41285)	4/25/1998 2:31:00 PM
From: John Lacelle	Read Replies (1) \| Respond to of 58727

j g cordes, Very interesting post. I think it is always important to look at the big picture when investing. One very important feature of this new stock market (since 1990) is that the Baby Boomers of America started to think about retirement. They looked at the various historical returns of investments and saw: Social Security (negative returns) Bank Savings 2% CDs 6% Money Markets 5% US Equities 10% (1929-1990) They also had IRAs, 403(b), and other tax reducing features so it was a no-brainer. This has lead to an explosive growth in Mutual Funds, and discount brokers. Given what I think are the demographics of the Baby Boomers and their behaviour, it seems to me that we will have a timeline something like this: 1990-2005 Hugh Bull market as money pours in. The Dow will hit 10,000 by 2001 and 20,000 by about 2005. I think we could see the P/E ratio of the S and P 500 hit like 40 or 50 (historical average is about 10). Then comes the trouble. About 1/3 of the working force of America is going to try to retire between 2000 and 2010. It is going to be one ugly bear. I don't know where the top will occur but I'd call it between 2005 and 2008. Our stock market and economy is gonna look like Japan's dead cat. The boomers who have lived a life of BMW's, Viagra, and Rogain, are going to tighten their belts and sell their stock. Watch as the housing market goes bust. The funny thing is, the Boomers will also demand that the Federal Government do something about their sagging fortunes. They will take it out of the hides of the 20 and 30 somethings. Hugh tax increases, and the result will be a deathbed economy as the politically powerful Baby Boomers try to extract as much money and support for their decadent spending patterns. I don't mean to sound too alarmist but my 37 years on this planet has taught me that people will kill the goose that laid the golden egg if given the chance. Just my humble opinion, -John