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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (18481)	5/26/1998 2:03:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 50167

Judy, perhaps you or Ike or someone else can answer this question for me. This market adjustment started out due to normal rotation by the funds which continued as a distribution phase of the market. Next we see strong evidence that the funds have been rotating from their sale of stocks directly into stock purchases such as stocks in the defensive group. Does it appear that the funds have generated a larger cash position for now? Or for the most part have the funds not held onto any cash and instead have been rotating the cash directly into stocks during this rotation that has been in place for several weeks now? Any ideas on this? My concern here is the possibility of redemption of money form the funds by the public which may force the sale of stock. We appear to be going through a period of negative market sentiment that is much in evidence today. I see that at least for now, the stock market has decoupled from the bond market indicating the possibility that there is money moving from the stock market into the bond market. Evidence has come out of a slowing economy followed by news reports indicating that even some portfolio managers are worried about the slowing economy. Hmm...just a couple weeks ago it was concerns over an overheating economy. Typical. Anyway, this continued softening of the market may persist for a period of time and may motivate the public into retrieving some of their money from their fund holdings. By the way, good points on how DELL manages their inventory on a "just in time" basis. I find the earning restatment also difficult to believe. Perhaps they have set up the accrual of certain expenses based on optimistic revenue projections. They have executed well in a "bull" market for their computers, but now perhaps Dell is running into a period of revenue (and earnings) slowdown. But if this were the case, I do not think this would necissarily force them into restating their earnings. Rumors! More likely, the rumors may be a reflection of the current nervous and even pessimistic sentiment in the market more than it has anything specifically to do with Dell. At most I think we may be in the future hearing from Dell about an expected revenue slowdown in a forward guidance statements made to the public. Any thoughts or comments? Bob Graham