Jack, Think about the timing and what brings the "old era" back.
Something happens to change the scenario, and suddenly people are
caught and panic ensues when the "new era" fantasy ends. Are we
there yet?? I don't know that we are.
>> Every bull market with stock prices rising in the face of
>> fundamental overvaluation has had an explanation for why it
>> was a "new era". Your explanation for the current one is as
>> good as any. We must accept, however, that all of the previous
>> "new eras" were eventually trashed as valuations returned to
>> "old era" levels.
I don't have a disagreement with your post. I don't predict that
we will see Dow 12000 before 6000. We have fundamental overvaluation
now, but that does not mean the top is in. It may be in. I don't
know for sure, and I must argue that nobody else really knows either.
My perspective is that I have felt the market is overvalued for so
long that I decided that I was missing something fundamental. My
solution was to consider the "megatrend" phenomenon, so I came to the
boomer investment boom as the driver. I am not a financial wizard by
education/training, but I am an EE who has been in and out of stocks
since 1972. I've also done options, commodities, and real estate.
I am not an expert in any of these, but I am not stupid either.
After being around a while a person suspects that something is going
on when "normal trends" change significantly, and a curious individual
is likely to theorize on the causes. Some people call this dreaming,
but with all my background in theoretical math and physics I prefer to
call this theorizing.
As I said in my original post, I am mostly in cash now. That should
say something. However, I am postulating here that we may be very
surprised at the definition of "how high is high" if the dynamics of
funding of this bubble are based as I am suspecting.
Ed Miller |
