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To: Gordon Quickstad who wrote (9980)	3/28/1999 5:43:00 PM
From: P. Ramamoorthy	Respond to of 27311

Gordon - Re.: This week's Barron's article on 10K DOW Earnings reports are expected to show a modest gain of 6-8%, according to First Call. The market's current expectation is disappointment in this qtr earnings. A modest surprise may help move the DOW up to the 10000 level. By the year end, problems like the y2k may create uncertainties which could cause volatility in the DOW. As you know, Goldman Sachs (A Cohen) predicts 10K DOW (revised slightly higher than last estimate) by the end of this year. Waiting to see. Ram

To: Gordon Quickstad who wrote (9980)	3/28/1999 6:32:00 PM
From: gvander	Respond to of 27311

Money need not go anywhere -- values, represented in this case by dollars, can actually vanish. For example, money multiplier can collapse. Collapses can occur in any area for a variety of reasons. Values collapsed in Japan, yet corresponding Yen did NOT "flow" anywhere else. This can happen in periods of unanticipated inflation or deflation. This can also happen when there is an unanticipated external shock which causes investors to reevaluate their investment horizons and/or risk preferences causing investments to be bid lower--this occurs not from selling (no trade actually occurs)instead the lower prices are caused by an unwillingness to buy for current prices. This causes prices to fall (traders drop prices to encourage transactions i.e. liquidity which is where their money is made) until a new equiallibrium is reached and trades begin again--but that value (represented by dollars) is gone forever WITHOUT flowing somewhere else. This can happen rather abruptly. BTW what happens when an economy or market runs low on buyers? I am pretty sure everyone who can has bought in over the last 5 years -- who is left to absorb selling let alone set a price for large blocks in need of a bid. Just my opinion.

To: Gordon Quickstad who wrote (9980)	3/28/1999 6:47:00 PM
From: gvander	Respond to of 27311

To sum up--Prices can fall without a suitable place for dollar proceeds to go. There are periods in the U.S. and elsewhere where it appeared there was nowhere for the proceeds to go and thus prices should stay high. This proved to be disastrous logic. In fact, that is the very period one should be seeking to scale back. When the alternatives are obvious, competing investments (in this case stocks) will already have adjusted (downward). One has to adjust one's portfolio before alternatives become available. Once the altnernatives become avaialbe it is too late -- the competing investment (stock prices) will have already dropped contemporaneously (sometimes in advance given the stock market is fowarding looking). There are periods where rates were so low that most considered leaving the stock market foolhardy, in fact, it is when it looks foolhardy that it is most wise. I appologize in advance for going "off-topic." Hope you find this useful.