Y2Kate:
You make some great points, and certainly owning stocks has been a 'miracle' of late. Here's my response to some of your points:
< But the financial industry is not the business of not owning stocks- and a healthy stock market is definitely in our national interest. There are powerful forces at work in
keeping it all afloat, and I think they are bigger than any of us. I think those long the market, over time, find themselves in alignment with those forces.>
This is a very good point, but IMO bolsters the REAL doom and gloomers in that by 'keeping things afloat' in the past few years [as well as wall streets hype machine keeping everyones money piling in] things have become MORE dangerous if a bad sell off does come. More people are involved, more leverage, etc. The analogy of the US Forest service eliminating forest fires for decades while brush piled up under the canopy until finally POOOF is a good one IMO. Bottom line on this point... I would NEVER depend on 'forces' to keep my money safe... trust yourself.
<And really, we are living in extraordinary times. Who could have imagined the prosperity we're enjoying today twenty years ago? Look at the wealth that's been created.>
If it's too good to be true it probably is.
< We are a very productive society still in the beginning stages of a technological revolution that has and is fundamentally changing the way we live and work and think. I think stock picking is going to be extremely important as people abandon the junk. But I just can't see the markets falling to pieces like many are predicting, and especially not now, with the fourth quarter looming.>
Last thing first... it sounds like you need a rally in the 4th quarter. You have to look at that fact and say 'do I want to be in this position?' I mean if your in it as a speculation I think that's fine, once we get through Oct, the markets traditionally rally through the hollidays, especially biotech with the conferences coming in Jan. But if your a long term investor worrying about the next quarter, I believe you own too much stock. Don't ruin you're life worrying about ANYTHING, let along stocks. As for 'a productive society in the beginning of a revolution', yes I suppose this is true, but as has been chronicled on this thread there have been MANY such instances in the past [railroads, telephone, electricity, etc etc] and at some point they ALL attracted WAY too much capital as the public piled in and far from guaranteed profit in these new technologies, it was closer to guaranteed loss as some point. Have we reached that point?? In .com for sure?? Many thing telecom as well, but the important thing is that you must realize, great new technologies will [some have] attract more capital than is reasonable blowing valuations to dangerous levels for investors... this happens, you have to decide whether it HAS happend [as many here believe, as you pointed out], but be aware that it can and will.
Good luck.
DAK |
