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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (8115)	2/25/1999 11:35:00 AM
From: Sam	Read Replies (1) \| Respond to of 9980

Zeev, "I also expect another mini economic revolution to be launched sometime in the next 5 to 10 years." What do you think will drive the new "mini economic revolution"? s.

To: Zeev Hed who wrote (8115)	2/25/1999 12:05:00 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 9980

Zeev, Our own DOW was stuck for 16 years in the range of 500 to 1000 between 1966 and 1982. What finally broke the range , IMHO was the launch of the PC and as a result the "information" revolution that ensued and the growth of a sizeable middle class outside of the western world. My own feeling is that the change that broke the 16 year trading range was the end of the giant, and I do mean giant, bear market in bonds. This bear began with yields at 2½% in WWII and ended in 1981 with yields approaching 15%. The underlying economic event that moved bonds was of course inflation. Now we have had almost two decades of improving inflation and lower bond rates. Going forward, I like you, see a wide trading range that may last 5 years or more. I believe this will be caused by sluggish profit growth resulting from profit margins contracting from their recent highs. Wages as well as other higher costs will eat into the ample margins that businesses have enjoyed. Top line growth will be lucky to keep total profits growing slowly if at all. Certainly the days of double digit growth will end. This is my recipe for a sideways market for years to come. -Robert