Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (57639)	8/21/1999 12:29:00 AM
From: Charles P. Hubbard	Respond to of 86076

Heinz, thanks for the very interesting and erudite response. There are indeed a lot of crazy theories being expounded to justify ever higher stock prices and to lure and keep people in the market. The one that holds that stocks should have no risk premium is particularly annoying to me. I was an officer and director of a small company that went public in 1968, (General Computer Systems). You had better believe that there was plenty of risk associated with investing in this start-up company as it never made a profit on it's own. (Today that fact might be a plus for the stock price.) It was later bought out and eventually became part of a successful company, but none of the founders ever recovered their original investment. Academicians posing such theories are just showing their ignorance, but VC's, MM's, brokers, underwriters, analysts, etc. all have their own selfish agendas for such nonsence. The buy and hold theory is another. I have a friend living in Atlanta who has first hand knowledge of people who have made a lot of money owning KO Stock from way back. She bought KO at 58 three years ago, watched it go to 88 and now back to 58. Her advisors have told her to "hold it for the long term". She is 78 years old. The grand finale will indeed be fascinating to watch, but as Arik says "it will end in tears" or worse. CPH

To: pater tenebrarum who wrote (57639)	8/21/1999 10:54:00 PM
From: wlheatmoon	Read Replies (2) \| Respond to of 86076

heinz, I am a bear at heart, but most of my returns have been from the long side and I don't mean long puts...-g- My bearish sentiments come from the fact that there are crazy valuations place on ridiculous companies. That's the only reason I think this market will hurt many people. Otherwise, solid companies deserve high PE's/valuations. Why? Because the demand outstrip the supplies. Period. The traditional valuation models may or may not hold and we won't know until it is history. People with no knowledge of the market are simply throwing money at it because they're told to. And why shouldn't they? Why shouldn't a 25 year old working a good job put money into a mutual fund with every paycheck and ignore it until he's ready to retire? Why shouldn't every 25 year old do that? He/she's got 30-40 years of employment and the money will simply grow with the market. Does not everyone think that the US economy will be the premier economy for the next 50 years? Will it dominate in 200 years? Who knows? But my money is on the US economy doing well. Sure, we'll have ups and downs,,,but for the truly dollar cost averaging investor, why not put in $200 or whatever every month into the market? Surely there will be corrections and it will be painful for some and some will have to sell,,,but if one does not overleverage in this market and can sit out the volatility,,,isn't one better off just investing? But the thought of DOW dropping several thousand points....sure, it can happen,,,,but a 1929 style crash? I suppose anything is possible. But how many of us have a impenetrable underground hiding place ready for when a meteor strikes? It's an unlikely event, but it sure as hell can happen. I know that's a bit of exaggeration, but it's to prove a point. I suppose the market appreciates a bear's presence,,,otherwise, there will be no one but buyers and no sellers. The pendulum in this market goes way too far in both directions. Right now, there's too much buying,,,and soon, there will be too much selling,,,but eventually there'll be too much buying again. But who's got time to sit and wait for the low to invest and who's got the balls to put money into the market when it drops 25%? sorry for the diatribe....had a scotch..-g- mike