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Politics : Ask Michael Burke
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To: PaperChase who wrote (62189)6/12/1999 10:00:00 AM
From: Freedom Fighter  Read Replies (2) of 132070
 
Paper,

>>The DOW climbed over 2500 points since your negative market comments
from about a year ago<<

I understand why many people equate the short term direction of the market with whether a person is correct or not, but I don't think that's an appropriate view for an "investor". The vast majority of seasoned investors realize that it's somewhere between difficult and impossible to figure out where the market will head. What they trust is that market prices will eventually reflect the values and business prospects of the underlying securities. That is pretty much what our system is based on. The efficient allocation of capital.

Discrepencies that arise between the two can take quite some time to adjust. Especially in an environment that is very momentum and liquidity based and has a great number of beginners like this one.

If stocks remain at this valuation plateau for another decade, then the bears missed something. But if 10 years from now we are trading at somewhere between 12-18 times earnings then stocks will be a bad place to have your money over that time. And if the market cracks in a major way and stays down then we know that stocks at these prices are crazy.
We are betting on the end result not the path that will get us there.

Wayne
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