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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: wlheatmoon who wrote (42502)	1/7/1999 12:54:00 PM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Mike, not everyone DCA's into the stk mkt. Many are sucked in after a period of prolonged rising prices -they will be hurt. I can't cite specifics on your buy and hold but i would say that human nature does not change greed and fear control the masses. The Japanese are a very tough and disciplined people yet many cashed out of their mutual funds. I don't think Japan's bear mkt is over -they will be hurt by their banks and when the US economy goes into recession. I expect the next bear mkt in the US to bring us back to Dow 3xxx range and the bear to start in early 99.This is an attempt to quantify my feelings I don't necessarily expect to be right other than expecting the next bear to be long and painful. Very few investors will have the discipline to execute the "I'm in it for the long term" strategy when faced with massive losses. Mike

To: wlheatmoon who wrote (42502)	1/7/1999 1:00:00 PM
From: Michael Bakunin	Read Replies (1) \| Respond to of 132070

No, you would have lost money. If you'd put $1,000/mo. into the Nikkei from '86-'98, you would have invested 13 x 12 x $1,000 for a total of $156,000. Allowing a 1% dividend yield (I have prices off Yahoo), you end with.. $111,806. Investing in T-Bills in the same manner, you'd have $223,296. Granted, this discounts the concomitant move in the yen, so perhaps you'd have broken even in dollar terms -- while investing for over ten years in a volatile asset class. In the S&P, you'd have ended up, not with $100, $200, or $300 thousand, but $597,103. Even small cap US stocks would have been OK -- you end with $369,742. mb

To: wlheatmoon who wrote (42502)	1/7/1999 2:45:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

MKC, When the mania ends, a great many of these cos. will either disappear or their stocks will go to single digits and never recover. When the recovery comes, most of what you will want to buy will be new technologies, not the dead crap from the previous bubble. I know if you bought the US market in the late 1960s, assuming you changed stocks and did not get totally wiped out by 70% of the tech stocks disappearing, and kept investing about $1000 a month, you were nominally way ahead by 1982, when the buy and hold crowd got even nominally. However, in buying power, you probably got even on a spending power basis with an extremely diversified, high quality fund dollar cost averaged, in early 1987. That was an inflationary crash. If you did the same in the late 1920s, you were in good shape in about 1947, getting your money back. So, it looks like you break even after a little less than 20 years in either an inflationary crash or a deflationary crash. Of course, if you did not buy the indices or a quality fund, and played the flavor of the month, it is difficult to say how long it would take to get even if you ever get even. MB