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Non-Tech : Bill Wexler's Dog Pound
REFR 1.620+2.5%3:59 PM EST
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To: Kevin Podsiadlik who wrote (6698)2/14/2000 8:56:00 PM
From: J.Y. Wang  Read Replies (1) of 10293
 
Cramer's kind of gone negative on the whole value investing concept. I think his
series today "Cramer the Contrarian Remains Unconvinced" is a must-read

I read it earlier today and I am unimpressed. I sent him an email about it.

Let's look at his "fundamental analysis". It's only the first half of what a rational person would do when purchasing anything significant -- determine whether or not what he is purchasing is "good". Cramer stops there, however. A rational person would go on to the second half, which is to determine whether the price is right. Cramer says price doesn't matter, as long as product is good. That's like looking at a 2000 Porsche 911, determining it's a "good" car, and then still buying it even if it's $500,000. That's what Cramer is espousing. That is what this market is based on.

There are really only two situations under which buyers of products/stocks/property don't care about price: 1) In a mania (like we are in right now); and 2) In a state of hyperinflation. The Japanese didn't care how much real estate was in the 80's. The Dutch didn't care how much tulips were. In an economy with hyperinflation, as soon as you get your paycheck, you went out and bought some durable good or property -- you don't care how much it costs because you know it will go higher. In manias and economies with hyper-inflation, price is never a factor.

If nothing else, what one should take away from Cramer's article is that we are truly in a mania that cannot end well.
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