[like] Intel and Microsoft (Nasdaq: MSFT). And we have 10% in companies that didn’t exist five years ago. Those that don’t have earnings, we say have to have a minimum of 20% in revenue growth.
B.E.: Do you look at any other factors?
HUMPHREY: One of the things that I look at is demographics of the baby boomers and the way [that the consumer has worked his or her] way through the economy. When you hit 20, you go to work; 23 to 24, you get married; at 26, you have your first child and are renting; 32, [you] buy the starter house; by 40, [you’ve] basically moved up to a larger house; and the late 40s is about when that spending pattern falls off. And if you look at the numbers, then that means I’m expecting this expansion to continue through 2008.
If you go back 100 years ago, when we went through a similar type period with the autos and phones, you probably had 50 automobile companies and they couldn’t all survive. Essentially, you’re going to get a shakeout, but some will be the dominant companies of tomorrow. So, many of these dotcoms with smart managements that are nimble, fast, and have gotten there first, like eBay (Nasdaq: EBAY), Yahoo (Nasdaq: YHOO), or Exodus Communications (Nasdaq: EXDS), [are going to be] tough to beat out.
B.E.: What impact do you think the presidential election will have on the market, if any, Mr. Coleman?
CARTER: He doesn’t care.
COLEMAN: Actually, I do care about the president. The president is a whole other matter [than the Fed] because he sets the tone in a fundamental way for how we will be governed and what the rules of the game are going to be. And so that office is humongous in the stock market. If George Bush wins, it will be a very different world and a better world, I would add, then if Al Gore wins.
HUMPHREY: I don’t necessarily see that as so.
COLEMAN: Well, let’s start with healthcare, because that is a very significant area. The approach that is taken by a George Bush will be materially different from the approach taken by an Al Gore, and I think that the approach taken by George Bush will be friendlier to those who are in the business of providing healthcare. I think that the healthcare stocks will prosper mightily if George Bush wins.
HUMPHREY: In terms of healthcare and stuff, I’m not sure. But I’m not sure that George Bush winning would be better than Al Gore. And the reason I say that is [because] I’m concerned about a major tax cut. I think it’s stimulative. And with the Fed sitting there saying we don’t want to see much in the way of inflation, I get concerned that that might be one of the ways that we blow this cycle. I would not like to see this economy stimulated any more than we’re currently looking at it. I like the idea of the “Goldilocks” economy.
KELLEY-WATKINS: There are