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Earl:
You had written:
-----Original Message-----
From: Earl Adamy <eadamy@xxxxxxxxxx>
>The public won't sell until it gets scared and that will not happen
>on a large scale until securities bought on the dips fall to significantly
>(20%) lower levels and it won't happen on a massive scale until prices drop
>to levels at or below the average cost of acquisition.
Yea, but, it's not as if most of the market is held individually.
Sure, on TV, every housewife is using Ameritrade to buy AOL
and Amazon from her kitchen - and no doubt, those investors
will get shaken out in the event of a severe correction. But, I
believe that the preponderance of the public's shares are still
held through mutual funds, pension plans, and life insurance.
John Q. Public isn't going to close out his 401K, and cancel
his employer-provided term life insurance, just becaue the
market looks scary.
I'm not saying that a crash can't happen, nor that the public
won't bail out of their individual investments if the market isn't
going up every day. Such a scenario would be murder on the
E*Trades and Olde's of the world. But I question whether
the percent of stocks held in this manner really represents
that high a proportion of the total shares outstanding. I have
great faith in the promotional abilities of the institutions to
convince their customers to continue to hang on.
Jay Mackro
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