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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: danderso who wrote (17569)	1/19/1999 8:57:00 AM
From: Wren	Respond to of 18056

This week's Barrons contains similar comments. In the annual round table discussion held each January, Oscar Schafer points out that in the 1950s and 1960s, stocks went up when earnings were up; in the 1970s and 1980s, stocks went up when interest rates went down; and currently the market is liquidity driven. In 1998, 162 billion in new money came into the market. A lot of it went into the index large caps either directly or through purchase of the S&P500 index. This has caused Microsoft, Intel, GE, etc. to grow to extremely high P/Es when compared to historic P/Es. Schafer said that investment decisions must currently be based on supply and demand of the liquidity.