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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: BGR who wrote (69935)	11/2/1999 1:44:00 PM
From: benwood	Read Replies (1) \| Respond to of 132070

BGR, Probability of such an event goes up with the time frame of the prediction. That is, there may be a 99% probability of a crash in the next 100 years (with a 5% confidence interval), but perhaps 5% chance with a 25% confidence interval in the next 3 months. I just made these numbers up, of course, but they illustrate how you can get a high probability number for an unpredictable and rare event -- just move out your end point in your prediction! The main problem, of course, is that we've only 1929 and 1987 in this century, and two samples out of 20000 or so trading days makes for difficult statistical-based predictions. But when you look at the chances of a crash during a mania, there just happens to be a much higher ratio that "end badly." You have to realize you're in a bubble, though, to know to use that tiny subset of data...

To: BGR who wrote (69935)	11/2/1999 1:57:00 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

BGR, I made no comment regarding the timing of any events. That is one difference between value guys and other investors. Value guys know they can't time these things and don't even try. It simply doesn't matter to us. I made only the claim that most value guys without vested interests think we are either in a bubble or that at least some valuations are crazy. "IF" (notice IF) they are correct, then at a minimum, future returns will be extremely disappointing for the vast majority. By definition everyone can't be smart enough or lucky enough to get out at the top. My point being that some of the worst case scenarios are at least a reasonable possibility from here. Again, "when" doesn't matter to the aggregate of investors. And in the mean time more and more money is coming in at highly suspect prices. So what I am trying to understand is why so many people are taking great pleasure in seeing potentially greater and more dangerous excesses form? It's a serious question, not a criticism. Wayne