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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Vic who wrote (1199)	8/26/1998 6:33:00 PM
From: Joseph G.	Respond to of 3339

Most institutional money is indexed these days.

To: Vic who wrote (1199)	8/26/1998 7:42:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 3339

>>>However, I think there are also rational explanations for the current valuations of internet stocks.<<<< OK we are waiting to hear why amazon dot com is worth the market cap of colgate palmolive. a company that has a decades long proven business model and dividend yield? also we would like to know why 6 internet stocks market caps are worth more than the whole singapore stock market or the complete gold complex? (and none of em have earned a dime - this bunch excludes AOL - which has earned a dime -g-) Waiting for a rational explanation? (yes I know graham and dodd are irrational in the new era stream of thing -g-) I second the motion to JOE G. all fund managers are closet indexers out of necessity to stay in business. >>>So what do I think about the direction of the market? <<< IMHO, It's very possible that July 20th was a peak that will be resistance for a long time, as was the 29' and early 66' peak.

To: Vic who wrote (1199)	8/26/1998 10:20:00 PM
From: Jags	Read Replies (1) \| Respond to of 3339

You should not be looking at just the amt of money going into index funds. You should pay attention to the fact that the indexes are the benchmarks for all mutual funds. All fund managers try to beat the index and a minority few make it. Because of this bench marking, funds buy lots and lots of index stocks, that way they can get closer to the index. Thats the reason for the index stocks being so popular and high and not the amt of money going into index funds. Plus ofcourse the blue chips means more liquidity and the rest you touched upon. Jags

To: Vic who wrote (1199)	8/27/1998 12:48:00 AM
From: Moominoid	Respond to of 3339

I read the Alchemy of Finance - and didn't like it. Soros seems to believe that everyone is irrational except himself; that only he can see the light. I didn't think it was much good either but there are one or two good insights but they are then dressed up as breakthroughs in the social sciences or economics which they aren't really. In the trading history sections there seemed little explanation of why he did what he did in any kind of way which made sense. Often he seemed to make money despite getting things wrong. Maybe that's the insight - but not the one he promotes. I also like your other comments. That's why I put the thing up there so that I could get good feedback from people like you. It is more effective than in SI posts alone. People talk a lot about indexing here (Australia) as well when it certainly is very small indeed. However, everyone is evaluated against index benchmarks so that the active managers may attempt to first get a roughly index weighting for part of their portfolio and then add value around that. I don't know if that is what they do, but the financial media seem to think that they do.