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

To: Mama Bear who wrote (51118)	3/10/1999 1:28:00 PM
From: Alohal	Read Replies (1) \| Respond to of 132070

A thoughtful response, which I always appreciate. My point actually was a bit different than what you perhaps understood. Many on this thread presume that anyone who disagrees with their perception of the market/world/future is an airhead who believes in the never-ending rise of the stock market. One would have to be a fool (greater or otherwise)to believe the market or any particular equity will go straight up. Stocks go up, stock go down, what one needs to look at are a variety of factors, such as, but not limited to, geopolitical events, demographics, socio-economic trends, revenue and earnings environments, and so on that when viewed together and subjected to some reasoned analysis allows one to come to some over-arching view of what the near and long term future MIGHT hold. Obviously some do this consciously and some do this sub-consciously ( a kind of gestalt process) and still others haven't a clue and wed themselves to what ever the current trend seems to be, with little or no thought to the future. Yet others eke out a hard-scrabble living without hope for a better future. In addition to all this, investors come in a variety of flavors, some with very very long time horizons, some intermediate and some very short term, like day traders. Obviously I could not possibly disagree with you that as the market(here I'm not quite sure of how you define "Market" since the collective market is nothing more than an agglomeration of the underlying equities, but I'll assume you mean general market conditions, the technical analysts would have a bone to pick with me on this one, but that's another story, another time) becomes more and more overpriced the probability of a correction increases. The real point of dispute is what you mean and what I mean by overpriced, which can be arrived at through very different analytical processes. I am in the camp(or perhaps just a loose association of folks)which believes that there has been a paradigm shift in the way investors view the value of individual equities, particularly in the technology sector. This is not to say that one simply tosses the old paradigm's methods of valuation, but rather, that one makes some major adjustments to those factors to take account of the increased speed at which innovation comes to the market place, increased efficiencies which are expressed as orders of magnitude rather than as increments. Boy this is getting a lot longer than I thought when I began! I'll try to cut to the chase. I came to my present position rather slowly and with the help of a number of people to whom I will be forever grateful. I now choose companies based on what I have briefly outlined above , combined with some fairly detailed research on the individual companies. Some argue that tech stocks are grossly overvalued based on present and projected earnings because they view the future one way. Others say they are undervalued given their potential for enormous growth. MSFT and INTC are perfect examples. For years I have listened to folks predict the sudden demise of these "bloated pigs" and for years I have watched and greatly benefitted from their astounding gains. Same thing , in a shorter time frame for Dell, Csco and Sun. Did I have any idea of the magnitude of those gains when I began investing? I would be a liar to say I did, I had no idea! Frankly, I don't know what the effect of the Boomers' (of which I am one) retirement will be, though I will try to position myself to take advantage of the changing demographics as well. I don't make the assumption that they will suddenly "cash out" in their retirement years, I suspect they will more likely plan to live off the income stream from whatever those investments might be (read conservative here) and make plans to leave the rest to their families, (not withstanding the "Die Broke" crowd. What I do know is that I have prospered these past five or so years to an extent I never would even have dreamed possible growing up on the mean streets of Chicago. What I do believe is that over the long term those who are invested wisely in the market will do better than those not invested or those who try to play the momentum or the timing game. I also know that there are still quite a few years until those boomers retire and believe there is still lots of value left in many equities with brilliant prospects for the future. Do I consider myself a stock picking wizard? Hardly. Do I consider myself both lucky and fortunate? You bet! Finally, I'm not sure why you believe my happiness is tied to my market gains. It is not, life has taught me better than that. At this point I'm retired and would stay retired even if all of my investments went to zero tomorrow. Unfortunately I was only able to enjoy my retirement for a short time before I lost my wife, soul-mate and mother of our children to pancreatic cancer last April. Happiness is nowhere to be found in money, but perhaps that's for another time, another thread. Sorry for the length and thanks for the provocative post. Good luck.