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Strategies & Market Trends : Bill Fleckenstein, the BEAR! Is he finally right?
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To: SkyDart who wrote (198)1/17/1999 11:04:00 PM
From: yard_man  Read Replies (1) of 259
 
IF one is just thinking about avaoiding losses or perhaps making some money ... but there are other aspects to this thing. The economic impacts are likely to be severe -- consider what would happen if stock market performance reverted to the mean for the past 50 or 100 years. I've read that this would mean that the DOW would be more than cut in half -- consumer spending would shrivel, a very large number of people would be out of jobs within a year or year and a half.

The "don't worry, be happy" folks criticizing Fleckenstein and others for looking to historical measures, may have made a bundle in the last few year -- and they may sell it all at the top and live very comfortably when the inevitable downturn comes -- but they will be in the minority -- it's a simple case of "can't get there from" here. These greatly inflated levels exist because a large number of people are staying invested --- any significant withdrawals of monies mean markedly lower prices -- not just a 5 or 10% off sort of deal. The gains are illusory for most. That;s hard for most people to grasp and will be hard to accept when it happens ...

So I think a more important question will be what is going to be the social and political fallout of a sever stock market decline. I don't think we can just look to
other countries for an answer to this -- the psyche is different here ...
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