The nets a big place with lots of opinions, some of them more convincing than others. Anyone with an agenda can go out and find support for a given position, even a radical one. Slider On The Black does this better than anyone. I guess that I'm in the camp that believes that's a good thing since it causes discussion and a review of some basic positions.
The question I ask is how right is Slider and how often is he right? According to him he's right all the time or most of it. Some would agree. I think he has usually been close on oil issues, but then so have most other posters on this board. When it comes to macro economic issues though, I think the answer is not much and not often. I think that if you took his original posts and looked forward, it would be apparant that he is most often following a fad or a radical position and is rarely right. This is sometimes not readily apparent since he has the ability to seemingly alter a position at will through the process of rear view adjustments in timing or meaning. (ie. panic Friday the 13th, otherwise known as Black Friday, meant, according to Slider and after the fact, panic selling or BUYING, either of which allegedly proves his point that the Nas and Dow are on the verge of collapse.)
The truth is that this is the same guy who said a few short months ago during the April meltdown of the Nas that he had moved into tech. When the Nas bounced he said that he had the best day of his investing career and intended to hold long term positions in tech stocks including such stocks as CMGI. Later when it dropped again he claimed to have sold all but his core positions. I think he should have never gone there and the results have soured him on tech and left him bitter.
Now he gives us the gleanings from the disaster threads and the bear analysts, together with the spin on the statistics and the facts. Is it really bearish that Ameritrade showed only 20% buys on the day the Nas went up almost 8% as Slider indicates? I don't think so, most of us are happy to get in before or at the begining when the institutional buyers are starting to buy, since those big buyers typically drive the market direction. The signs were there earlier when a news article said that interviews of fund managers showed a great deal of complacency on their part regarding the falling market with the low volume that accompanied the fall.
Is Slider right in his dire predictions about the general market THIS time? Well, he might be since he gives his prediction a long period to materialize and some of the issues he addresses are true economic concerns that will weigh on investors and drag down the market or the potential rate of increase in the market. But are there considerations that might justify a continued increase in the value of the Nas and the Dow, and oils and the general market? Sure, or we wouldn't have this horse race. Anyone that thinks that this long bull run is based purely on tulip mania fails to acknowlege that this is a unique period in history. Never before have we had so many trade barriers reduced, so many markets opened up, so many countries with free market or quasi-free market economies, so many technological advances that create products that are within the reach of and demanded by so many individual purchasers, never have we had such a free flow of information across countries and among the citizens of countries and the demographics of investing in the major market countries are extremely favorable right now.
Numerous other factors support a higher valuation of the general US markets than in the past. The government has seemingly learned some lessons about destabilizing market economies as a result of monetary policies. In spite of the problems in the middle east which are admittedly extremely troublesome from both a market perspective and from the more important perspective of human suffering, the world is a safer, saner place than it was in years past and more materials and human recources that were previously utilized for the cold war are available to improve production and the quality of life. Perhaps the most important factor in justifying an increase in the valuation of the US markets is the one thing that we are importing from around the world that is our most valuable import of all, The bright and innovative minds that drive changes in technology and that improve the way we do business.
We are currently the most vibrant market in the world. We have the most recources, the most freedom, the highest rewards for innovative, inventive and talented people in the world and good minds from everywhere are joining US companies. Just look at some of the names and hear some of the accents of the key people in strong tech companies and notice the strong international flavor. That combination is making those companies leaders in many sectors of the world. As long as US markets are such lucrative markets for goods and services and as long as the world marketplace is growing in terms of freedom and size, US companies should continue to be leaders in growth and profits.
Who knows how long the combination of demographics, US leadership, successful government fine tuning, relative world peace, technological advances that increase productivity and create new markets and decreasing trade barriers will last? Will the market drop or just slow its rate of growth until valuations are closer to historic valuations? Is the trade deficit something we can continue to live with? Are there or will there be factors that will create pressure for other countries to destabilize the dollar? Can we continue to grow the world's economies with the energy recources we have available or will that require shifts of recources and bottlenecks that require a significant slowing? These are all things we should keep in mind, but all the talk of what happened 10-75 years ago and all the discussion of charts without a recognition of some basic changes in the landscape seems narrow and shortsighted.
I've been buying and selling oil stocks, especially oil service stocks. I am less willing to sell them now than I was in the past because I think they are about to make a move up like the semi-equips did about 10 months ago and I don't want to get left behind. I've also been buying select tech stocks in such sectors as flat panel display equip companies and wireless last mile solution companies. I confess to having even bought into my first significant internet company with a purchase of cmgi at 18 1/16. I appreciate all of the great commentary on this thread over time from all of the regular posters. I just wanted to finally weigh in I hope this thread doesn't become the sky is falling thread and lose the quality it has kept for so long. Ed |
