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

To: Fred B. who wrote (60109)	5/21/1999 12:54:00 AM
From: JF Quinnelly	Read Replies (1) \| Respond to of 132070

Are you using margin?

To: Fred B. who wrote (60109)	5/21/1999 12:34:00 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 132070

>>It is just that some have a hard time to admit that they were wrong and some resort to name- calling out of frustration.<< fred, i disagree. let's separate business and stock price (they are two distinct things). in 1997, the bulls said that the s&p would grow their eps almost 20%. the bears said they were smoking lefty luckys. well, stocks went up 20-25% and the s&p BARELY tweaked out any growth - low, low single digits. you assert this makes the bears wrong - at least that is what i'm hearing. they bears were right and the bulls were wrong. however, there was so much demand - not based on eps growth, that stocks went up anyway. you associate most of that demand to baby boomers. surely they play a part. however, there are other parts, too. depending on how you weight them (and nobody knows for sure), the strength of this bull is ominous or on shifting sand. monetary growth of double digits has to have an impact. why? that marginal money allows for folks to put more money in the market. reduce monetary growth and what happens to demand? it will be reduced. same for debt creation. now, if we can grow debt and money in double digits through 2005 and 2010, i will be impressed. i think there are certain risks associated with this kind of policy that may cause it to stop. when it does, marginal money will be reduced or stopped and a high % of marginal money is feeding the market. i also think you underestimate fear. it is easy to do after a bull market. hey, five years of great returns, i'm not worried about next year. this is the kind of mentality that allows folks to buy three times as many shares at $100 for a stock they bought originally at $10 - with little change in fundamentals. if the market gets scared, imho, no demographic issues will save it from current levels. there are many ways to invest. real estate used to be a biggy. it isn't anymore. but, it could be... and t-bills... anyway, it is interesting to observe stocks grow eps in low to mid single digits while stocks grow 30%. how long can this go on? another 10 years? will 5% eps growth be worth 200 times eps? especially compared to a guaranteed 5% return on a t-bill? here is a question for you. how long will it take a .5% return (200 pe) growing at 5% to become worth more than a 5% return (comparable to a 20 pe) on a t-bill (you re-invest the interest)? i look forward to your answer. overseas? have a safe trip and see the sights!