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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (6648)	9/8/1998 6:25:00 PM
From: Kory	Read Replies (1) \| Respond to of 8002

sb, I am not claiming that volumes are down, just that more money into the market means almost nothing. I don't know how much "new" money is coming in as I find it hard to define what "new" money is. As you are fond of saying, the market can act somewhat like a Ponzi scheme. Assume we have two investors each of whom own 50% of a company. Current share price is $10 per share. Today Investor A buys 25% of Investor B's stock for $12 per share. I guess you could call this "new" money in on "A's" part, but what about the money that investor "B" took out? Tomorrow, Investor B decides he wants his stock back. He pays Investor A $12 a share and regains his original shares. Is Investor "B" now putting money in? If so, what about Investor "A" taking out? And quite miraculously, the stock market now says that the Company that A & B together own is worth $12 a share versus $10 a share which was determined just two days ago. Both investors are right back where they started from, but in the parlance of the short term trader, they are 20% up. What??? The same can happen to the downside if they both decide to execute trades at $8 a share. Which is why I don't worry about short term increases or decreases in stock prices because they reflect only a minor slice of reality. And I don't worry about stock market money flows since wealth is not really created by hyper-exchange. That is not to say that monetary policy is not important - it very much is from a psychology and liquidity standpoint. However, I find I am neither a psychologist nor a plumber, and Alan Greenspan seems a likable enough fellow. So I stick to companies who I feel are creating real wealth. That is companies who do an exceptional job at providing services and goods to consumers who value them and make their life better. Assuming the Fed and markets don't botch the macroeconomic scene, these companies will do fine over time. Open question to you: I agree very much with your "productive resources" statement (though I don't necessarily agree with the market level), but do have one concern. What if there are more people than are needed for productive endeavors? Just curious about your view on this. Kory P.S. You asked a while back what other companies I follow. I own some large caps, Dayton Hudson, Maytag and Gateway; some small caps including THQ (very similar valuation to Midway with a better 3 year track record), SECX (now well below where I purchased it :-), and Great Plains Software (GPSI). Then have some set amounts each month put into a S&P 500 index fund, both in 401K and after-tax.