Hi John,
I have a friend, now deeply underwater in her tech stocks, but doing fine with her real estate, who was a participant in the stock market in the early 1970's. She described the days, weeks and months on end in '73-4 when the market listlessly headed lower. Just a point or two per day on the blue chips, but inexorably withering, as you so aptly phrase it. The general public is now fully aware of the tech wreck. IMO, since the valuation of the stock market is no longer tied to future revenue streams from the corporation for the investor, but rather is operating on the "bigger fool" theory almost exclusively, I see no new fools coming into this market for a very long time. That is the only thing that will move the market up. The present lot of traders are too short term oriented and will chop off any rally on the long side with prudent profit taking, and on the short side, will be forced to cover before some of these stocks reach their natural resting place at zero. (EXDS is a great example of the pumping of a hopeless basket case)
Best, Ray :) |
