|
Bukun, couldn't leave this post alone. You neatly summarize the 'new
era' market view. I tend to agree with (1). (3), in my small view,
has to be wrong. If not, where's the GDP? However, there clearly are
potential efficiencies (e.g., business-to-business ecommerce) that are
finally being realized, so I'll half agree. (2), it seems to me, is the
real weak link. While it is obvious to you and me that the risk premium
for equities has gone down, I posit a good chunk of the assets in the
market represent people who don't understand that that means their return
expectations necessarily have to be lower.
If enough market participants have unrealistic expectations,
their bids will crowd out others and set prices -- which is my fear
these days. -mb |
