Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

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To: Dale Baker who wrote (6113)	1/15/2000 7:03:00 PM
From: Graeme Smith	Read Replies (2) of 10293

>> You are right and all of them are wrong? I never said I am right or wrong. I said there are four possible outcomes. Two positive, two negative. It is very brave to ignore the two negative posibilities. >> That's the part I have a hard time swallowing. >> Regression to a statistical historical mean could be >> totally statistically flawed for all you know. I could have regressed to a historical low instead. That would be a 90% drop. But, your right. I could be flawed to expect PE's to return to the 10-20 range. That was my possbility number 1, PE's might remain at 200 indefinitately. >> I wouldn't bank on it in the face of a ton of people >> going the other way for years on end despite all these >> facts that you deem obvious and inevitable. Thats a non-productive argument. I'm saying we are in a stock market bubble. You can't say we're not in a stock market bubble because the majority of people are bullish. The definition of a stock market bubble is when everyone is over optimistically bullish. >> Did you ever consider that the mountain of actions to >> the contrary tend to invalidate your assumptions? I'm not sure what you mean by "mountain of actions". If your talking about the number of people buying stocks, then I go back to the last point that this is the symptom of a bubble, not the disproof of one. >> The argument I always hear is that the bubble MUST pop >> one day. Who cares if it hasn't burst yet. History is sort of on my side here. Every previous bubble has popped. There is nothing to say that this won't be the first bubble not to burst. It's just a brave bet to make. >> - like all good economists, we simply ASSUME that it has >> to happen. That is why economists aren't allowed to >> manage real economic activities. Where did economists come into the picture? I agree that economics is the art of explaining why you were wrong, but I think Mr Greenspan might disagree about economists not being allowed to manage real economic activities. Just after I my last round of postings I found the following article. Strangely it almost looks like I was paraphrasing it, but honestly I didn't read the article till afterwards. My guesses of a 70-80% drop in the Nasdaq or 25 flat years (a number I pulled out of my arse), were exactly matched in the article by a "risk" of a 76% drop in the DJIA or 25 years of flatlining. fiendbear.com Everyone should read this article at least twice. There's no "the sky is falling" hyping like I am guilty of, but it gives an realistic view of the risks associated with todays market.

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