Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Roger A. Babb who wrote (15956)	12/5/1998 11:05:00 PM
From: blast_investor	Read Replies (1) \| Respond to of 18691

Roger, How do you think of margin effect? E-trade, etc, all changed margin policy for internet stock. I expect the internet stocks to further crash down next week, simply because of this "margin call". I bet there are more longs in the margin than shorts. All I should do is to buy puts next week. How do you think of this issue?

To: Roger A. Babb who wrote (15956)	12/6/1998 7:46:00 PM
From: Bob Trocchi	Respond to of 18691

Roger and all... Below is the end on an excellent interview with Martin H. Barnes, the managing editor of Montreal's Bank Credit Analyst. The whole interview can be found on interactive.wsj.com It is a WSJ fee based site thus I will not copy the whole interview. In summary, Mr. Barnes makes a very understandable case for why the continual double digit stock equity growth cannot continue. His last answer to a question sums it up quite well. Bob T. >>Q: Keep this up, and you won't be invited to many holiday parties. A: It's just, as I said, that the current perception of what is normal is not normal. In reality, if you can get a 6%-7% long-run return from financial assets, that's pretty good. Don't forget, if the long-run growth rate in the economy is 2.5% annually -- or very optimistically, 3% -- based on a combination of population growth and productivity gains, and there's a bit of inflation on top of that -- say, 1% -- that adds up to less than 5% annual growth in nominal GDP over the long haul. To think that you can somehow have financial markets -- which at the end of the day are just claims on the real assets of the corporate sector -- grow forever at a double-digit pace is absurd. You'd soon have the corporate sector owning everything. It makes no sense at all.<<