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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (22311)	7/30/1998 10:35:00 PM
From: Dr. Bob	Read Replies (2) \| Respond to of 70976

Gottfried, I'm with you on the 401K's. Too many people do not understand that it IS different this time. Not entirely; some things never change, and someday, the market will hit bottom. But for a while to come, many, many people are putting as much as they can into their 401K, IRA, etc. because they can no longer expect Social Security and the company pension to take care of them. They don't understand bonds, mutuals underperform the market, so they're buying stocks more and more - and as opposed to the "shoeshine boy" days, many of them actually know what a good investment is. Foreign money is different, too - LOTS more of it this time around. Again, guys, before you flame me, I understand that some things never change, and when earnings really do hit the wall (I don't think they have, Jacob), the stock market will reflect that. In the meantime, though, there's LOTS of money out there which has only one place to go until the sentiment changes drastically, regardless of all the signs you cite. These signs work, they tell you some day the bear will come, but they don't tell you when. First ones off the plane may get a parachute, but they'll still be going down, even if the captain gave a false alarm - and there sure have been plenty of those the past 4 years! How do we tell which one really is right??? For me, I'm going to continue to invest in companies which continue to beat earnings estimates quarter after quarter, are in industries which won't go away in a recession, and let the market do what it will. But thanks for the warning - can I fly the plane after you exit, Jacob?! Bob

To: Gottfried who wrote (22311)	7/31/1998 10:20:00 AM
From: Teri Skogerboe	Read Replies (2) \| Respond to of 70976

Gottfried, Re: "I haven't seen a shoe-shine boy lately but can think of one source for new money: 401k plans. Let me invent some numbers. 50 million people have 401k plans. Their average salary is $40,000 per year. 8% of the salary goes into the plan. That comes to $160 billion a year. I have no idea whether that is enough. Often the employer kicks in $$$ also." I know that we haven't seen a "shoe-shine person" lately; it was used as an expression and was the same analogy used in an old Wall Street tale. (At the time, it was real.) While you are correct in many ways about today v. 1929... I read that today's market is correlating to the "tune" of approximately 97%ish to the movement in the 1987 market. The percentage was surprisingly high. Some new numbers on AMAT... AMAT: SOUNDVIEW FINL decreased estimate for fiscal year ending 10/98 from $1.33 to $1.07 on 07/27/98 AMAT: SOUNDVIEW FINL decreased estimate for fiscal year ending 10/99 from $1.66 to $0.98 on 07/27/98 AMAT: SOUNDVIEW FINL decreased estimate for quarter ending 07/98 from $0.22 to $0.15 on 07/27/98 And, thank you for posing the 401k supposition. Will give this one more thought. We are definitely in a liquidity driven market, no bones about that. People love US stocks... no, that's not even right, people love the Nifty-Fifty. This is a narrow market. TS