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MsFiscallyFit's Notes
for Week Ended May 4, 2007

Is the market showing signs of reaching a top? It seems that every Monday morning I look at the news for the financial markets and see that we are experiencing “merger mania” again. It looks very similar to 2000 when “merger mania” was last in full swing. Companies are buying companies for ridiculous amounts of money. They don’’t care what they pay because they are paying for these acquisitions with “funny money” aka their stock. With the Dow hitting all time highs in excess of 13,000, stock values are rising along. Investors want more earnings to drive the price of their stock so companies buy earnings and can purchase these earnings without having to cough up cash which might be detrimental to growth.

In 1999 - 2000 we saw this kind of “jump in and buy something before the stock prices falls and buying power is lost” attitude right before the major correction.

Could we be reaching another top??

Only time will tell.....
 

webaward

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