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Yahoo!!! This is unbelievable!! 20 points in two days?
Very tempting to short, same for AOL, amazon, but on
second thoughts, no.
-----Original Message-----
From: A.J. Carisse <carisse@xxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Tuesday, June 23, 1998 2:50 PM
Subject: Re: Bull Mania Alive and Well
>Dennis Conn wrote:
>
>> If the common perception of the stock market is one of speculation
without
>> risk, at least as far as buy-and-hold sales pitches imply, then what IS
>> "unreasonable enthusiasm"? It seems to me that the definition validates
the
>> opinion that the current lofty levels of the market, combined with the
>> continued inflow of funds from an ob-sessed public, constitute a mania in
>> the classic sense of the word.
>
>Dennis:
>
>This might seem odd, but I wonder in what sense the word "mania" applies
here
>at all. What makes current levels "lofty"? Why do you classify
individuals
>saving for retirement as constituting an *obsession*? Now, of course there
is
>risk involved, and certainly way too much for me - who, as an
ultraconservative
>player, never holds overnight. The bear is on the horizon for sure -
it's
>just a question of when - and it will be a big time and probably prolonged
>pullback. So - does that mean that values are too high? What does too
high
>mean? How can a stock's price be too high anyway? I remember a trader I
know
>who shorted YHOO a little while ago, since he reasoned that it was
>"overpriced." A couple of months later, it's up a further 50%. Is this
>mania? Why would it be - traders were willing to pay a premium at prior
levels
>in order to capture expected growth (the stock price, that is), and were
>rewarded for it. This might have constituted enthusiasm, but it wasn't at
all
>unreasonable - in fact, I doubt many traders had expectations that it would
>move considerably less than it did. Is it overvalued now? Why in the
world
>would it be? Why would it be unreasonable to expect it to move higher
still?
>And this is an extreme case. Sure, a major selloff may take place in the
near
>future with it, but in the mean time, it hardly has been foolish to ride
this
>play while its charts still look great. As far as the overall market goes,
it
>doesn't require more enthusiasm to propel prices forward - the same or even
>less would do. What it comes down to is that it isn't the least bit
>unreasonable to expect investors to continue to allocate a percentage of
their
>income to it in order to reach their long term financial objectives.
>
>Regards,
>A.J.
>
>
>
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