Come on. Take just about any stock or mutual fund. The markets were at least somewhat "rational" up to November of 1998. Nov, 1998 through March, 2000 was absolutely insane. There is no other word for it. Greenspan did some idiotic things. People were greedy beyond belief. This created an enormous bubble. Let's say we keep all the gains up to Jan. of 1999 for many individual stocks. Let's say they only correct back to that point. Even though the Nasdaq has retraced on average, it will get hurt much more because the "popular" stocks made such insane gains. Plug in any of these "liquidation value" stocks you speak of, and see where they were in Jan. 1999. Looks to me like a normal correction of the bubble in light of a world economic slowdown could easily take us to those levels. Remember to adjust for splits, and I think you will see that even a stock like JDSU, which is at $7.05, down from $126.00, has quite a distance to go to reach Jan, 1999 levels. Face it -- how many people do you know who doubled and tripled their accounts from Nov, 1998 to March, 2000 in mutual funds even? This is NOT normal and should NOT have happened. Even with the past year and one half, most people still stand on THREE times the money they had in 1996. The historical 10% return will average out. Guess what that means for 2000, 2001, 2002? Best of luck to you.
I remain,
SOROS |
