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Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: JDN who wrote (6131)	1/16/2000 10:35:00 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 10293

Thanks for the answer. The whole discussion shows me that we are indeed at a top, at least in some sectors which have some weight in the indices. IMHO the Japanese market had little to no regulatory oversight nor protection to assist it. It is somewhat arrogant to think, -the regulatory system in the US can prevent a crash (in fact it does not exclude it as best seen in 1998). -a "well functioning" regulatory system can lower volatility. Maybe it lowers volatility in the daily course of trading, if it for example imposes fluctuation limits (which would again negatively affecting liquidity). -a regulatory system works during exaggerations. It doesn't, and when it comes to an exaggeration then concerted emergency measures may help. The "ultimate crash" is IMO only a result of continued disappointments, and the concerted selling best explained with mass psychology not rational markets. In fact, I compare the US market of 2000 with the Japanese Market of 1990. Because both are overvalued and the fundamentals of both are clearly negative. A last word on it: People buy and hold stocks because they live up to what I call "adaptive expectations": Because stocks go up by 15 to 30% a year, they buy in expectation that this trend will continue in the future. Best seen is that in the performance of single sectors and even, stocks. Because they have risen so much, they are the winners, the darlings and will presumably continue their walk. while others which are out of favor will be dumped regardless how cheap they are. When it turns out that for example the techs (or certain sectors) will not deliver because they got simply ahead of themselves then they may sell off.., but to me it is unclear whether the proceeds will be reinvested in the stock market indefinitely. It is the absurd level of valuation in the e commerce, b2b and networking sectors which makes a rotation less likely.