Zeev,
I was hoping you would answer for me. You say it much better.
Susan,
Please read all the replies to my previously referenced post, if you have the time. I thought there were replies about liquidity coming from all different areas. I should probably review all of them myself.
About the real estate market, that's something everyone understands. It's not hard to know when they are depressed and "scare" people. But stocks are strange investments. I don't know how many people I run across that don't know the names of the companies they are invested in, much less what they do, their PE, PSR, P/B ratio, PEG. Just very basic fundamental skills are totally lacking. They hear Louis Ruykesyer talking about it, and run out and buy it Monday morning. They see an ad on TV and buy the company the next day.
It just seems like equities take too much effort for a lot of people to research and understand. So they just invest because, "Long term, I know it's the right thing to do because I know I won't have S.S. to rely on when I retire." Now how many times have you heard that? Ask that same person what a PE is, and I bet a large percentage of them don't know what you are asking. So that's why I feel the liquidity argument is important. Just as important is the fact it holds down interest rates.
I do have to tell you though, my new time horizons are only about 3 to 6 months out. Not years out like it used to be.
All IMVHO of course.
MikeM(From Florida)
PS Wasn't "The Truman Show" filmed in a little town outside of Destin? |
