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Gerrit Jacobsen wrote:
>
> This is exactly the reason why the market will fall. The market is
> designed in such a way to weed out stupidity. A market that is
> continously rising attracts invariably many stupid people who think it
> will continue this way.
>
> However no social system nor nature can afford that stupidity gets
> rewarded.
>
> That is why the market must crash in a big way. It will crash when
> stupidity has reached its climax. This rally will be remembered as
> one of the biggest sucker rallies in history.
>
> If a 10% earnings slow-down at Intel can knock a few billions of its
> market-cap then something is wrong.
>
> If Turner and Gates can give away a few billions for charity then
> something is wrong.
>
> If companies with no revenue can have market-caps of half a billion
> then something is wrong.
>
> If a society can and wants to spend a billion on one film then something
> is wrong.
>
> Shall I go on ?
>
> This is an asset bubble.
>
> Gerrit
>
I've been thinking that this market will collapse when an event comes
along that causes the general public to drastically slow investment in
mutual funds and equities. A good hard downturn in the ecomony should do
it. People need the cash now, maybe withdraw some funds from the market
to meet immediate needs, etc. The values that have been jacked up due
to demand start falling, then falling some more, resolve waivers,
investors pull more funds, then panic sets in and ka boom, BIG CRASH.
I think we should remember Soros' quote:
"Economic history is a never-ending series of episodes based on
falsehoods and lies, not truths. It represents the path to big money.
The object is to recognize the trend whose premise is false, ride that
trend, and step off before it is discredited."
So, lets ride this trend with one foot out the door, ever ready to bail
at the first sign of real trouble. Hell, isn't that what trading is all
about anyway.
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