Irrational Exuberance

[Gonz]

Dec. 5, 1996-Alan Greenspan. We then went past 11,000 on the DJIA. Since then it's been downhill. The world is falling apart. My 401(k) is collapsing. The sky is falling, the sky is falling.

Do you realize that as of closing 10/04/02, we're still ahead of 12/05/96 by about 20%. So much for collapsing markets.

*edited the date for homelan *

 

[HomeLAN]

You know where the market will close on 10/15/02? Please tell me.

A basic opinion, backed up by a little history. In 1973, we had a situation in which the stock market, which had been going through a long-lived bull, tanked 40% in one year. It then moved basically sideways for 10 years (averaging about 6% per annum, as compared to around 11% over the history of the Dow). The turnaround didn't come until the middle of Reagan's first term, and then kicked off basically the longest bull market in history (with a small break here and there, like 1994).

We just ended that magnificent bull market. We're down 40% from the high. Think about it.

 

[HeXp£Øi±]

The market has never closed down three years in a row. Not even during the great depression. This is the third year. In and of itself closing down three consecutive years is bad enough but more than that it could also be a terrible sign of things to come. Remember, the market is a forward looking indicator. I just love to watch those cnbc analysts pump everything but no one knows the future. Economic inicators can be trusted and when i see people like Warren Buffett buying 25% of the worlds silver i begin to worry.