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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (2813)	12/25/1998 7:09:00 AM
From: HairBall	Read Replies (1) \| Respond to of 99985

Jim: Well, can't believe I am up this hour on Christmas Day, but the male cat is unhappy with the visitors. He can't retreat to his own room...someone he does not know is in there...<g> He has been whining at me most of the night! Your analysis of the S&P Index is a conclusion I reached years ago. NASDQ and Dow Indices are much the same. I know the Dow Indices are share price weighted as compared to market cap weighted, but in the end the results are the same, the strong stocks impact the Indices more than the weak ones. And, if a stock gets too weak on the top tier Indices it gets dropped and a stronger stock is used to replace it. Indeed, this skews the Market toward the positive! I guess there really is no way to have an S&P 500 that speaks the truth completely. The very nature of using the top 500 stocks will not permit it. Now my female cat is eating the ribbons off the presents. She has already forced my wife and I to reduce the Christmas Tree...ornaments are the she cat's favorite food during the holiday season. I guess the wife and I feel honored we are allowed to serve our pets...<g> The stock Market serves its secondary purpose to provided a method for capital acquisition for Companies and it also serves its primary purpose as well...wealth redistribution. Trust you will have a great Christmas. Regards, LG PS: It took me an hour to write this...those darn cats...<g>

To: James F. Hopkins who wrote (2813)	12/25/1998 8:19:00 AM
From: Monty Lenard	Read Replies (2) \| Respond to of 99985

Jim, when I first bought MSFT (Pre Win95-when the beta version came out - just before the release to the public) the PE was 49. It is now 89. How can this continue? Monty

To: James F. Hopkins who wrote (2813)	12/26/1998 12:46:00 PM
From: Follies	Read Replies (2) \| Respond to of 99985

Jim I don't know if I agree with you about the SPX calculations but my gut tells me you haven't got it quite right. If a stock goes up and all the others stay the same, the weighting will go up for that stock but your holding of that stock goes up propotionately so you don't need to buy more of it. Could you give me a two stock example of what you mean? I certainly agree that droping off poor performers and adding better performers make the index out perform the overall market, and issueing stock will of course change the weighting, but I think price movement on CAP weighted indices mirrors CAP propotional holdings, no need to adjust.

To: James F. Hopkins who wrote (2813)	12/26/1998 1:11:00 PM
From: Follies	Read Replies (1) \| Respond to of 99985

Jim, I reread your post and the part I'm not sure about is... ..well index tracking funds buy more of the gainers and sell more of the losers, every day the only reason a fund has to sell is if there are net withdrawls (or of course a component change) in which case they sell LESS of the losers because they make up a smaller percent of the index. Do you agree that the index correlates 100% to the total market cap of its components? At least, I think that's how it works. BWTFDIK? IUTKJ! dale