For all practical purposes, the fund managers are forced to invest
this new 401k cash.

Isn't this a real bubble?  Forced savings being poured into funds
every payday?  And having the effect of proping up the market?

I really can't see the triggers that will break the 401k bubble. Bears
beware.

401k's, regardless of the market, are a solid long term investment.
This is investment 101.
People putting money into 401k's right now are simply getting more
shares for their money.

97% of any 5-year period on the market, it has been up
100% of any 10-year period on the market, it has been up

So smart people will always continue to invest long term on the market
and not panic like the short term sheep. ;)

Interesting relief rally this morning...nothing quite like a premature
celebration. I'm also glad that I bought some XLF/SPY calls before
close friday to balance out my predominantly short portfolio. It makes
this painful, temporary move up more palatable.

Should be an interesting first few hours today - today and especially
tomorrow should set the tone for the rest of the week. I tend to be a
bear, but with all the whipsaw rallies I tend to play it with less
conviction.

I don't think you can call 401k money a 'bubble' per se, because it is
not very liquid and people aren't going to panic and pull all of their
money out of their 401k anytime soon... anyone else?

Also,

I'm not entirely convinced this is a relief rally either - supposedly
'big money' is coming back this month, and if we have high volume
(looking that way), this might be the end of the bears...

http://www.ft.com/cms/s/0/c92d888a-7871-11dd-acc3-0000779fd18c.html

Individual ownership of US stocks has fallen to a record low,
highlighting the growing importance of institutional investors in
domestic equity markets, according to a report to be issued Tuesday.
Retail investors owned 34% of all shares and 24% of stock in the top
1,000 US companies at end-2006, said the Conference Board, an industry
group. Both numbers are record lows. By contrast, individual investors
owned 94% of all stocks in 1950 and 63% of all shares in 1980.
Institutions – defined as pension funds, investment companies,
insurers, banks and foundations – held 76% of the shares in the top
1,000 companies, up from 61% in 2000, the group said. Overall, mutual
funds have been the fastest-growing institutional investors,
accounting for 26% of assets, compared with only 2.3% in 1980.

I think it comes down to simply management. I used to work with an old
fellow, long gone. Who had a very diverse portfolio of stocks through
the 60s, 70s and 80s. He finally researched a lot of Mutual Funds and
decided to pick those that matches his personal investments style. He
stated: "That managing all of the positions, dividends, etc... took
too much time and effort". So he started moving positions to liked
minded funds. I think for the most part this is why people in general
have moved to rely on the funds, something the funds are certainly
willing to charge you for...:>

Lazy mans way to investing...Someone always willing to do it for a
price....?Right?

"401k's, regardless of the market, are a solid long term investment.
This is investment 101."

Investment 102: This is a crock of sh-t

The 401K is the white-collar criminal's piggybank and nothing more.