Matt, you are quite wrong, at least as far as i'm concerned...i'm playing the mania as well. i'm buying stocks that i know are basically worth maybe one tenth of what i'm paying almost every day...but i'm taking my profits quickly, after all 20-30% moonshots in a few days time are quite normal these days.
don't forget that the bull's profits, unless they take them, are only on paper. in the meantime they leverage their bets ever more, margin debt is exploding. that's not rhetoric, it's a fact.
i know there's tax loss selling going on...nevertheless, this does not invalidate my argument about crowded trades and the need to increasingly finance purchases of mo-mo stocks by selling everything else. i have never said one shouldn't participate in the bubble...i'm merely pointing out where it's obvious weaknesses and danger signals are.
this is the biggest market mania of all time, and as long as you know that and are nimble, you should do o.k.
but don't forget, the majority of today's 'investors' are very unlikely to keep any of their paper profits. after all, not everybody can sell at the top, and when the bottom falls out of this bubble, it will likely happen fast and furious.
you mention tech is the only thing 'in fashion' right now...well, it's not the first time this is happening. in past manias, whenever they were 'in fashion' with 'concept stocks' lacking any appreciable fundamental value soaring, the paper profits were closing in on the point of being wiped out.
regards,
hb |
