Junior Balloon - thanks for your message.
>>Item 1. You have to wait for the future to play itself out.
My point is, though, that investors are overly optimistic about the future. People rarely talk about the risks associated with Amazon's business model - they only talk about how Amazon is going to capture the world's retail business.
>>Item 2. I don't know how they measure the savings
>>rate, but if it doesn't take into account 401 k or
>>other monies invested in the market it is a bogus
>>number. Each month I put my savings into the
>>market. That is where I save my money.
I'm not certain on the savings rate formula either. But I believe it is something along the lines of "individual spending - individual earnings" - which would help to explain the high debt levels we have. As for your 401k, I hope you have a well-diversified basket of stocks.
>>The market has always been a casino.
The market works best when it is used to provide capital to help companies grow. It works worst when stock prices are moved through constant speculation by traders.
>>Many people have lost their life savings in the market.
>>It is nothing new.
My view is that when someone loses their life savings, that it is not a good thing - even if that person is not me (we can't function as a society if we wish ill financial health upon our neighbors). If enough people lose their life savings, it drags down the whole economy - and effects the livelihood of those that don't even participate in the market.
>>The tulip mania analogy does not fit the current
>>internet situation.
I disagree. The Tulip Mania of 1630s Holland provides a very good example of a time when investors were willing to pay large amounts of money for tulips that really had no value. When I see people buying Priceline stock, I see people buying worthless pieces of paper - and the same is true for many internet stocks. But to set the record straight - I've mentioned many other investor manias in my post - including the South Sea Bubble, the South American Mining mania of the 1820s, the England Railroad mania of the 1840s, the Gold Rush, the Silver Rush, etc. In all of these, investors shelled out large sums of money for things that had little or no value - and in all of these more investors lost money than made it.
I wish you the best with your investments.
Thanks,
Eric Wells |
