finally: someone else parroting my fear expressed earlier on the INSP thread, the stimulus for which came from viewing a cnbc chart which scared me right much in terms of market direction:
Message 14916772
DiabloMarket Commentary for the week ending 12-15-00
DiabloFact to Ponder
While the day to day disappointments of this market may seem
confusing, we
believe it is all about "regression to the mean". What we mean by this is
simply that the order of things generally follows a pattern. If that
pattern is skewed one way or the other in an extreme fashion, a
backlash
often occurs, returning the overall trendline to its normal position. Some
call it a pendulum swing... This is quite true, we believe, for the
NASDAQ, which was wildly overbought, culminating last spring in a
'play at
any price' mentality. Thus, the backlash is a period of substantial
underperformance, after which the long term trendline will look
"normal"
again. We would like to call your attention to the 7 year chart of the
Nasdaq...along with an obvious growth trendline. Draw the picture. Do
the
excercise. We believe you will see our point. This type of 'regression
to the mean' occurs in all facets of life...lets look at the 'Greenhouse
Gases' Theory...that earth Temperature has climbed this century due to
man
made pollution...leading to Global Warming...and it is our fault...but
wait... The same scientists, and the Geologic record will tell you, by
and large, that the last century was one of the coldest in recent history.
Thus, this century's warming trend may simply be a 'regression to the
mean'. After all, earth temperature has fluctuated wildly
before...Scientists tell us we have been in and out of 18 Ice Ages in the
last 2 million years or so...'regression to the mean' Ponder it! |
