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Strategies & Market Trends : The Stock Market Bubble
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To: Dale Baker who wrote (2990)12/31/1999 4:47:00 PM
From: Scott Overholser  Read Replies (1) of 3339
 
Dale - a very cynical view you have. The reason it doesn't hold water is because well reasoned predictions of bust are based upon sound economic observations. The broken clock theory supposes that there is no reason behind the prediction (the clock is stopped.) The folks which use sound economic reasoning to warn of impending bust can describe in advance the way events will unfold in the bust. This sequence is known because the current economic problems are known to all. The thing that cannot be known is the turning point. This cannot be known in advance. Indeed, if it could be known it would certainly be avoided. In fact, it is only because human nature is to disbelieve the naysayers that the bust occurs. If everyone had faith in sound economics, the bust would be avoided. The simple absurd reason is that people would avoid the economic sins in which they have engaged. It is almost laughable.

Having said all this, I agree to some extent with your broken clock theory: many predict bust without knowing why. They really are broken clocks.

Regarding the stock market, there is no reason to pull out or go short based on these economic issues. Even though our economic situation is precarious, the reality is that the only way to make money these days is on the bull side.

Let me invoke Livermore once again: There is only one side in the market; it is not the bull side or the bear side - it is the right side.
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