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Technology Stocks : Network Appliance
NTAP 117.28-0.2%Dec 9 3:59 PM EST
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To: Jacob Snyder who wrote (9098)9/7/2001 11:42:12 PM
From: techreports  Read Replies (1) of 10934
 
(investors) illogically become euphoric when stock prices rise and unhappy when they fall. They show no such confusion in their reaction to food prices: Knowing they are forever going to be buyers of food, they welcome falling prices and deplore price increases. (It's the seller of food who doesn't like declining prices.) The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer. None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling. Unfortunately, Bertrand Russell's observation about life in general applies with unusual force in the financial world: "Most men would rather die than think. Many do."

Yes, but if food prices fall because the food is spoiled or damaged or has a deadly virus then it doesn't look like a great bargain anymore. Chicken at a 50% price cut doesn't look so good if it has a deadly bacteria? I doubt you'd take the chicken for free. Same with stocks..

Company fundamentals have changes. People are now concerned about a recession with a possibility of it lasting 2 or 3 years.

Not saying your wrong. I'd love to see the market and the economy rebound in mid-2002, but no one really knows.
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