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Don't kid yourself - a large percentage of these 401k's, pension plans, and
mutual funds require nothing more than a phone call to reallocate assets
among a menu of asset categories! Further, when the bull market of the 60's
ended, the assets in mutual funds declined in a big way as assets were moved
into relatively safe CD's and other non-equity assets.
Earl
----- Original Message -----
From: Jay Mackro <jmackro@xxxxxxxxxxxx>
To: Earl Adamy <eadamy@xxxxxxxxxx>; Real Traders Forum
<realtraders@xxxxxxxxxxxx>
Sent: Friday, October 15, 1999 7:27 AM
Subject: Re: FOMC - "this time it's different"
> 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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