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To: TA Trader who wrote (610)	2/1/1999 6:12:00 AM
From: Arik T.G.	Respond to of 686

TA Trader, >>John Q Public is investing in the market at the highert % ever seen. This is in both cummulative and relative numbers. Pension, profit sharing and 401K's are pouring $ in daily. This change of tastes is usually associated with a bubble. >>Take overs are at a record rate further increasing available funds for reinvestment. Please explain. I can't see how takeovers generate money. On the contrary, if the takeover is by means of exchanging stocks then nothing changes in supply and demand, and if cash is involved then it puts the deal under corporate investment in equities column. BTW, I didn't mention stock buyback plans, which falls under same column. There is still some corporate money on the sidelines (as long as there's positive cash flow or willingness to increase corporate debt to support buy back plans), but corporate money is not buying out the public as is evident from the mf inflows numbers. >>World uncertainty is driving funds to our markets. Change of tastes again. >>What's really happenning that few talk about or acknowledge is that the laws of supply and demand regarding equities are inverted from anything we have seen in the past. A new era then? >>This won't continue for ever A brief new era? >>I firmly believe that all pullbacks will continue to be met with this pent up demand and it will continue well into the 2nd quarter notwithstanding increasing volatility. I agree. Even in a bear market pullbacks are met with demand, only the upward moves that follow are met with equally forceful supply. A 30-40% pullback '87 style would probably be met by eager buyers that would think they're getting the bargain of their life. and this could be true for 1-2 years, until the real bear begins. ATG