Michael,
But I thought that your position was that the market is not rational? :-)
I think that it is unwise to draw exact analogies to past economies. For example, inflation was unheard of till the 20th century, there was hardly in inflation from the 1400's to the 1900's. However, most of our present day models are based on the hyper-inflation of the 1920's and more recently the 1970's. Also, the valuation models that you are talking of doesn't handle growth companies well at all.
As for globalization, isn't that exactly what is protecting the US from hyper-inflation in the face of monetary growth and realtively easy credit? Not a smokescreen, but reality.
As for technology, I think you are grossly underestimating the importance of the internet and it's contribution to productivity enhancement, cost shrinkage and resultant inflation fighting capabilities. And this is true not only for technology companies, it is true for grocers (to bring up your favorite business) as well. No more well-lit stores to maintain, an warehouse is all you need. For the consumer, it is no more waiting in lines freeing the time up for other jobs. This results in growth companies with enormous potentials. I urge you to not overlook those.
As for 401k, I have already conceded that point to you and Bakunin, but I am not going to try and time it, nor am I going to shake in my boots in preparation.
-BGR. |
