Hi James, thanks for your reply. Yes, Vegas is not quite the same thing as you point out. But players' attitudes and responses are interesting because as the good roll gets longer and longer (more and more money is being won), the volume of play, the amounts played, and the enthusiasm of the players, all seem similar to the euphoria and behavior I see with the DJ or S&P hitting new highs. And the gambling outcome is obvious - the only question is when. And that is what people are saying also about investing now -- the good times are going to come to an end. And in the past, it's often not ended well for the players (or for observers - ala the economic declines which affect everyone and which might also occur concomitantly (I was just waiting to use that word -g-) with the market decline)
If as you indicate, market pricing depends on believing that other people will be committing to buying stocks to take them off sellers' hands - and I believe that this is so (someone has to be around and willing to buy my stocks when they reach fair value -g-) - then why are people so sure that stocks are at a peak as they concurrently bemoan the fact that more and more people are coming into the market and making ever riskier investments? Isn't this all grist that will push stocks even higher?
For me, the answer is I don't see any bullish sentiment. On this thread, I would call it cautious at best. I can't believe - don't believe - the Economist article in Crimi earlier post which says (I think) Merrill is encouraging people to up the percent committed to stocks. My full service broker, my discount broker, VL, everything I see, all say reduce or, if buying, buy to hold. Yes, we've got excesses - Tokyo Joes, beer-drinking Harvard psychologists with 2 year track records now stock experts,etc.--but mostly people are very, very cautious and worried. That's what I think I'm hearing you say also about your professional colleagues.
So from this sentiment standpoint, maybe the market peaks are close at hand as all who can, slowly walk to the exit doors. -g- Paul. |
