RE: If you do not use facts for your investments decisions, are you using a Ouija board or perhaps sympathetic crystals.
Jim K,
Markets are often unreasonable.
How many times have you seen a stock or a market react incorectly, or rather opposite the way you expected it to, to news ?
Fundamental facts are usually one of the best things to go on, But at times, like now, historical facts are expected to continue out 2 years. People are talking about valuing DELL stock on 1999,2000 earnings.
Well, all of the SEA and Indonesian unrest is forcing investors to look a little closer to home.
As the focus shifts from 1999,2000 and to the 1st Q of 1998, Investors are questioning their forcasts.
My quote is Reality is only important when perception is forced to deal with Reality.
Perception is that all is well.
Reality is that 25-35% of the global economey is not well.
We do not know how bad it is yet, but by the time we can sort out the real numbers, the markets may have or will have discounted what they tell us.
That is the delima, are they weak, (mkt recovers quickly) or are they really bad (mkt does not recover and may get worse on hearing the numbers) or does the mkt get it wrong, up or down.
3 years of 20+% gains makes one want to think that nothing bad is going to happen. It is posible that, as money flowes to bonds (flight to quality) that the market gets damaged enough to make investors reluctant to come back to equities, Yes even DELL.
Jim, I do not know how long you have been investing, But think back...What have you seen the market do.
Does this seem like things it has done before ?
Is what is causing the mkt to behave this way seem like the things that made it behave in the past ?
I don't know your answers.
I think there has been a tectonic shift. Can DELL go back to $100, sure, Can DELL go to $50, sure.
Right now, I think the Risk to the down side outweighs the Reward to the upside.
Jim |
