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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 340.02-0.3%Jan 7 4:00 PM EST

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To: MrGreenJeans who wrote (428)7/21/2000 8:33:19 PM
From: sea_biscuit   of 10065
 
Why real damage? Can't the earnings just moderate?? Why the extremes???

Why the extremes? Simply because we are at extreme valuations. Even if the earnings only moderate (which can happen only after the companies have exhausted all their accounting tricks), the stocks will be taken out and shot, because stocks are priced today for perfection and nothing short of perfection will be tolerated. This will be followed by decline in consumer spending which will result in steeper earnings declines. And so we will end up at the other extreme, almost solely because we had gone to the opposite extreme in the first place.

IMO, anybody who thinks that we will get out of this mess with little or no damage has got to be kidding...
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