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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Marconi who wrote (10076)	6/16/1998 9:18:00 AM
From: Joey Two-Cents	Respond to of 18691

Marconi, IMO there's a few factors at work here keeping the market over valued. 1) constant cash inflows 2) no perceived alternative investment 3) self preservation of money managers & brokers 4) mindset that stocks cannot go down. A recession with stagflation would take care of the first two issues which in turn would take care of the last two issues. The Nikkei is down 60% in 7 years and that's with a people who are as single minded and nationalistic as any. When US investors start to bail out on stocks watch out for the stampede heading for the exits. Here in NY in the 80's a 2 BR co-op in Queens went up from $15K to $ 150K in 10 yrs. Housing prices on a 3BR cape went up from $ 30K to $ 280K. People thought these 20% annualized gains would go on forever (people need a place to live) even though inflation and wages were increasing only 4% per year. The market crashed, banks went under and prices never fully recovered. All during those times the "experts" said housing will never go down and were projecting prices of $ 1M on that 3BR cape by the millenium. If I'm getting 4% raises who was going to buy the $ 1M house? Obviously no-one. Who will buy a stock with no earnings and no dividends? Eventually no-one.