Les, RE: Tulipmania
The boom created a wealth effect that ignited inflation in other assets in Holland. The price of houses, land, horses, carriages, and luxuries of every sort rose dramatically.
What we still haven't seen in the US that we saw in Japan in the 80's, and we read about in the above quote, is inflation. It is interesting that the issue today with Greenspan was exactly that topic. And it makes sense that he is using inflation as a measure of whether or not we are becoming a true bubble. If he does his job correctly, he will hold inflation down with the interest rate and keep the market under control.
I took profits mid day yesterday because it was a weak monday after last week's pricey yet thin run up. (thin referring to lot's of declining issues) Plus we really haven't had a sell off since this bull rally started in June. Also of note is the increased posting on this thread. It would be interesting to correlate the number of posts on this thread to market movements. I am looking for a one or two day sell off, then I'd like to get back in for one more push into next week in selected favorite issues, then a boring bearish August.
Greenspan's comments may make a worse impact than I am stating. The real opportunity here is to watch how the market reacts to this. If the market shrugs those comments off, than you have a snorting bull, and a good chance of a blow off rally forcing Greenspan to play his hand.
To a look at shorting AMZN or YHOO today but that is for the gunslingers. Jesus those stocks move fast.
RS
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