Roger:
I agree with your assessment of the current market psychology; as a result, while this thread always makes for interesting reading--and, in rational times, would also make for PROFITABLE reading--it's obvious we're not living in a rational market. We've entered an age in which the following is commonplace: people are taking days off from real jobs to daytrade penny stocks (I've seen postings from these people on several threads); SOES shops charging $5000 for an introductory class are packed with eager new students even though SOES will not exist a year from now; New York taxi drivers are asking their passengers about how to get Instinet (true...happened to me today); and people are fantasizing about moving from the cities to the Rocky Mountains to become full-time daytraders, spurred on by the likes of late-night infomercials from Jake Bernstein. We've entered an age in which Maria Bartiromo's ratings are higher than Dan Rather's, and people don't care whether their President is lying or telling the truth--as long as the NAV statistic keeps increasing for their mutual funds every time they check (which for many people is once an hour from their real job). Ultimately, this too shall pass; the current baby-boomer generation has always had obsessions, from The Beatles to Betamaxes, that fall by the wayside. The only uncertain element is timing...but I hope it happens before we become a nation of loners, whose only satisfaction in life is sitting in the dark watching CNBC, checking our portfolios, and counting our money.
As a result, until we see some kind of major market break, I think it's unwise to hold anything more than token short positions--especially in companies like AMZN and YHOO, which are the poster boys for the current mania. When the wave finally crests, there will be plenty of time to make money on the downside. |
