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To: GST who wrote (49076)	4/6/1999 8:47:00 AM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 164684

G, >> I have the feeling that most people think the market is driven by 401k money -- LOL. << Back in October 1997 there was a lot of talk about how money from Asia was coming to the US. But it was going almost entirely into bonds. As you know, the stock market crashed while this influx was occurring. So how can you say that Asian money is propping up the stock market (except indirectly thru the bond market) ? One more thing that may bring even more money into the US market is the talk that Japan may permit pension money to be invested outside Japan. If that occurs, then $ trillion might come to the US instead of flowing out. What do you think ?

To: GST who wrote (49076)	4/6/1999 3:23:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 164684

Cash coming into the market from private investors has ben a factor, IMO. But the addition or subtraction of a few billion that comes from private investors isn't often a trend in itself - it just isn't that major unless to the extremes. It can be a factor if movement in and out coincides with other flows, which is often the case. In a market that is being helped by global monetary policies and events, greater confidence is felt by individual investors who add their pile to the bet. But the ebb and flow of foreign capital has more to do with prospects for investment and stability in their own countries as it does with the prospects for American firms. The broad global trends change over a period of years. The bottom has been seen in most of Asia and South America while US valuations have grown precarious. I think the world and US economies are still in the midst of a mega trend of economic expansion that will continue for several years. But as downtrodden markets elsewhere become more attractive, valuations grow increasingly risky, and the first tinge of inflation starts to set in, the market will adjust. Inflation is still largely in check. Some rises in oil, wages and other things are still being offset by reductions in prices elsewhere. The degree and duration of the "dis-inflation" in prices has astounded most economists. I think the Internet will extend and amplify this effect of world-wide increases in competition and will help bring down prices. E-commerce now makes up only about 2% of US commerce and much less than that on a global scale. It is expected to grow to 15% to 30% of commerce in 10-15 years. I think the ease with which business is conducted will be such that prices are driven down such that it helps keep inflation in check.