Wall Street Armageddon:
Regarding the comment that brokers are now trying to coax every one and their dog into the current market, wasn't it Nelson Rockafeller that, circa 1929, was near Wall Street one day getting his shoes shined by a shoe shine boy who began recommending stocks to him as he shined his shoes, was taken back and shocked with the reality that wild speculation had taken over such that the shoe shine boys were now pushing stocks, and sold his entire portfolio before the famous crash of 1929???? Is the current mania of the masses indicative of the same phenomena??? If that is the case I must admit I am one of the many lemmings in the crowd (invest on margin and call options in tech stocks). Right or wrong everyone has been indoctrinated with "buy on dips, hold long term, don't sell, the market is the only place to be, blah, blah, blah, blah." I don't have any idea what it will take to get the herd mentality stalled or heaven forbid moving in the opposite direction. However it does seem clear that low unemployment, investment on the internet, dow mania etc. has more money pouring into the market than ever before. The market seems to be disconnecting itself from investment fundamentals and seems to be starting to just proceed ahead on speculative inertia. If . . . . that is the case it will be a stunning sight to see everyone starting to head for the exits at the same time. One more thought (especially for all under 40), it has been uniform throughout their lives that the demographic bulge of the baby boomers has changed all of the rules as they have moved through life. It now seems as if they (now at peak earning power and facing retirement in 5-10 years) are driving this market higher than perhaps any other factor as they plow their excess earnings into the market in anticipation of looming retirement years. WHAT HAPPENS TO ALL OF US (under 40's) WHEN THEY (following that now familiar mantra of conventional wisdom) RETIRE AND PULL THEIR INVESTMENTS OUT OF THE MARKET INTO SECURE FIXED INCOME INVESTMENTS (since they no longer have the security of employment to keep them in for the ride). IS THAT WHEN WE GET LED LIKE LAMBS TO THE SLAUGHTER???
One final note. After the high reached in 1929, it took the Dow Jones Industrial average 27 years to make a new high again. |
