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

To: Dr. Bob who wrote (22312)	7/31/1998 12:44:00 AM
From: 16yearcycle	Respond to of 70976

Hi Bob, "when earnings really do hit the wall (I don't think they have, Jacob), the stock market will reflect that." In the past, earnings have exploded while the market crashed. Late 1990 is a decent example, but the 73-74 correction was classic. The 1969 pullback was caused by rising interest rates, the 1973-74 debacle was caused by rising interest rates, the market soared in 1977 with declining rates, it floundered with sky-high rates until 1981, and with rates dropping for 3 months, finally exploded. Rates have dropped ALMOST continually since then as the market has marched skyward. Oh, rates rose dramatically, but temporarily, in 1987, 1990,and 1994. Yes, you know what happened when rates rose those years. Rates have been sliding pretty consistently since late last summer, and the stock market has acted indifferent at times, but then soared to catch up later. There are several things to watch for, but rising interest rates are the main indicator. The bond market will react first.

To: Dr. Bob who wrote (22312)	7/31/1998 12:14:00 PM
From: Teri Skogerboe	Read Replies (1) \| Respond to of 70976

Bob, Re: "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." I disagree (not flaming though). Most individual investors are clueless as to what makes a good investment. And in my view, this has been a "momentum market" more or less, for the last 6 months. Last I checked, "momentum investing" is not related to "what a good investment is". JMO, Teri