heinz,
I am a bear at heart, but most of my returns have been from the long side and I don't mean long puts...-g-
My bearish sentiments come from the fact that there are crazy valuations place on ridiculous companies. That's the only reason I think this market will hurt many people. Otherwise, solid companies deserve high PE's/valuations. Why? Because the demand outstrip the supplies. Period. The traditional valuation models may or may not hold and we won't know until it is history.
People with no knowledge of the market are simply throwing money at it because they're told to. And why shouldn't they? Why shouldn't a 25 year old working a good job put money into a mutual fund with every paycheck and ignore it until he's ready to retire? Why shouldn't every 25 year old do that? He/she's got 30-40 years of employment and the money will simply grow with the market. Does not everyone think that the US economy will be the premier economy for the next 50 years? Will it dominate in 200 years? Who knows? But my money is on the US economy doing well. Sure, we'll have ups and downs,,,but for the truly dollar cost averaging investor, why not put in $200 or whatever every month into the market?
Surely there will be corrections and it will be painful for some and some will have to sell,,,but if one does not overleverage in this market and can sit out the volatility,,,isn't one better off just investing?
But the thought of DOW dropping several thousand points....sure, it can happen,,,,but a 1929 style crash? I suppose anything is possible. But how many of us have a impenetrable underground hiding place ready for when a meteor strikes? It's an unlikely event, but it sure as hell can happen. I know that's a bit of exaggeration, but it's to prove a point.
I suppose the market appreciates a bear's presence,,,otherwise, there will be no one but buyers and no sellers. The pendulum in this market goes way too far in both directions. Right now, there's too much buying,,,and soon, there will be too much selling,,,but eventually there'll be too much buying again. But who's got time to sit and wait for the low to invest and who's got the balls to put money into the market when it drops 25%?
sorry for the diatribe....had a scotch..-g-
mike |
