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To: Walt Corey who wrote (45254)	5/28/1998 5:07:00 PM
From: stock bull	Respond to of 176387

Walt, I fully understand your position. However, the market must drop (20 to maybe 50%) at sometime. It simply can't keep going up forever. By the way, a 5 to 15% drop is what I consider a correction, a 20 to 50% drop, IMO, is a bear market. Of course, a bear may go on for years. I think the market going up forever would violate the laws of physics, or economics, or both. Stock Bull

To: Walt Corey who wrote (45254)	5/30/1998 10:00:00 AM
From: jbn3	Read Replies (1) \| Respond to of 176387

re ... Something is different now that may help explain these 'new rules' Unlike 10 yrs ago, there are now billions of dollars pouring into the market now that wasn't there 10 yrs ago. Virtually every employee is now an investor, if only passively, as opposed to only the very wealthy and retirement funds. It's simply supply and demand for a finite number of investment alternatives there is lots more money going into it, the price has to rise...has to ... Walt, I tend to agree, with some reservations. As you point out, every month megabucks flow into the market because of thrift savings plans, 401Ks and IRAs. Although this does create a continuous demand, it does not preclude the market from going south, either suddenly or severely. It does tend to provide an added safety feature, like a drag 'chute or an air bag. As I see it, even if the market drops severely enough for a lot of fund managers to sell and go to cash, at some point equity prices drop to a level where valuations and earnings expectations combined with the continuing influx of cash force them to recommit to equities because of relative return expectations. At that point, albeit a lower one, equity prices start to trend higher again, and will eventually eclipse their previous tops. So I think that your scenario holds generally true as long as wages and remuneration (and consequently, investment cash inflows) remain strong. It may fail if they should drop precipitously, or if the average citizen investor begins to doubt that equity participation will outperform bonds or gold. JMHO DELLish, 3.