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To: RocketMan who wrote (5683)	2/24/1999 12:20:00 PM
From: Smart Investor	Read Replies (3) \| Respond to of 41369

An interesting headline, biz.yahoo.com Is this the things to come? More and more PC sellers are offering free internet access. If this continue, it will cut into AOL's profit. If Gateway is doing this, could DELL and others be far behind?

To: RocketMan who wrote (5683)	2/24/1999 1:41:00 PM
From: Steve Robinett	Read Replies (1) \| Respond to of 41369

Rocket, You comment that during the real estate boom people askedHow could homes worth 30,000 ten years ago now be worth 200,000? The obvious answer is that someone was willing to pay that much. I'm not being flip. The pricing model for residential real estate is very different from the usual equity pricing models. Residential real estate is not usually something one buys with an eye to the return it gives you. Within the context of a given communities population growth, income growth and inflation--all components of real estate pricing--the real question is how much one wants to live in a particular place, a totally subjective measure of value, whereas the real question with equities is how much it will return and how that compares to other returns. I'll keep my point simple. Boomer money is driving the market to levels considered overvalued by usual models (cash flow, earnings, whatever). Even Greenspan agreed with this one yesterday. The market will stay overvalued as long as Boomer money is flowing in but, at current levels, it could lose 20-25% and still be overvalued using the usual valuation models. And a 20-25% drop would scare the crap out of a lot of people. Brokerage houses are worried about overvalued Internet stocks sparking such a selloff (see the front page of today's Wall Street Journal) and the impact it might have on novice investors' enthusiasm for the market. I'm not making predictions just pointing out a potential problem. Best, --Steve

To: RocketMan who wrote (5683)	2/24/1999 9:16:00 PM
From: Brian K Crawford	Respond to of 41369

Rocketman, you brought up real estate booming in the 70's and 80's. I believe THAT period was the historical aberration for inflation and interest rates that has served to distort a lot of current thinking about "how high is too high" for p/e's. Based on long-term experience (100+ years, not just the most recent twenty or thirty) neither interest rates nor inflation are especially low now. I am in your camp, trying to do my driving looking thru the windshield, not into the rear view mirror. I subscribe to Dent's analysyis too. They can call me a Pollyanna if they like, I am bullish. Brian