p40warhawk
I enjoyed your post and I hate it when someone says that their portfolio has experienced a “meltdown”.
However, I do differ from you on this point -
when you said -
“It can’t last because the problem is technical and not fundamental, unless you consider psychology to be part
of the fundamentals--and I don’t.”
Psychology may not be found on a balance page or in
the earnings report but I believe that it is the essence
of the market and therefore cannot be dismissed.
The history of mankind can be said to be a history
of speculation. Risk taking has always been a vital
part of our lives.
With risk and speculation comes the inevitable
and unavoidable consequences and evils of emotion.
We fear that our decisions will lead to pain or
losses and so we are unwilling to take a risk.
We fear that our failure to act will lead to even
worse consequences, so we act impulsively.
We attempt to protect our gains for fear they will
be lost.
We are motivated by greed and desire to make small investment turn
into large profits, so we act on emotions ignoring
rational thought.
Another point - and here I assume you’re talking about
the NASDAQ and the internets.
“The market is currently looking for any excuse to rally.”
I’ve been tempering my “short” talk on the board, trying
to remain at least casually upbeat because I felt
people might be getting weary of hearing about
short selling this market. But my real take on this is
that the NAS is in serious trouble and the nets in particular. These blowhard types (D.W. and if you
remember Kim Edwards of IOM) have had their day in
the sun.
As I stated maybe a year or more ago, these companies
that rely on selling stock to generate income will be
found out. They will be trashed.
The hype machine may still be functioning but we’re
now seeing that the institutions have shifted money
into real companies - check IBD list of companies
making new highs... these are companies that have
truly exceptional fundamentals, earn money
and will continue to earn money without any
pie-in-the-sky, “reorganizing” hoopla.
Good companies don’t need to look for “any excuse” to rally.
The NAS debacle is freeing up gobs of money to move
into untarnished companies with real growth.
I say the psychological sentiment that you choose to
ignore has shifted.
As it did in the past, value matter once again.
That having been said, I hope you come out of your
meltdown some day soon and prosper. |
