Date: Mon Apr 28 2003 16:12
trotsky (kapex) ID#377387:
as a self-pronounced expert on the emotions of greed and fear, you should be aware that the bulk of the investing public was literally consumed by greed in late '99 - early '00. they threw RECORD amounts of money into 'growth funds' in qu.1 of 2000. what were they thinking? that the Wall Street firms would step up and say 'no, stocks are a bad deal here, we don't want your money'.??
i'm telling you again, i had fiery debates with the polyanna's of the 'new era' at the time on SI - i proved to them that e.g. maintaining Cisco's growth rate was a mathematical impossibility. i used that one as an example because it was ( and still is probably ) a very well run firm. i was able to take the cream of the crop, and prove to anyone with only a smattering of common sense that it was the height of foolishness to pay the price it was going for at the time. i even debated George Gilder, one of the pre-eminent 'gurus' of the new era, and patiently explained the mechanics of a financial asset bubble to him ( he insisted the many tera-bites of information propagating on the internet were the most important economic variable one needed to consider ) . and many much better known market commentators ( Fleckenstein, Russell, Grant, to name a few ) warned eloquently of the dangers of the market, and hinted frequently that the accounting standards had deteriorated to the point of being actually, or almost, fraudulent in many cases. the information was out there for those who wanted to avail themselves of it. i'll say it again, if one wants to play in the stock market, one better know what one is doing.
are the actions of the WS firms at the time excusable? no, they are not...but in a mania ( which ultimately originated at Mr. Greenspan's printing press ) everybody and everything gets swept up in the euphoria, and the 'bezzle quotient' as Galbraith called it invariably goes up into uncharted waters as well. after all, as long as everybody's making money, no-one cares how they're making it, right? it's only when money is lost that the thinking caps are put back on and the recriminations begin. mind you, it was all sooo predictable. Enron is simply the equivalent of the Insull empire's collapse after the 1929 market crash. the declining market quickly exposes all fraudulent activities that were started while it was still going up...history is not just rhyming in this case, it is indeed repeating. down to our very own modern Pres. Hoover. |
