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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (2634)	2/6/2000 5:11:00 PM
From: Dale Baker	Read Replies (1) \| Respond to of 3543

I think the point has to do with valuation, specifically that the prices of many high fliers are justified based upon wildly optimistic growth rates of revenue projected out 3-5 years with little room I might add for error. Ultimatly, stock prices are determined upon return of cash flow (projected out to the future of course) to the account of the shareholder. You are assuming that valuation models have never changed and can't change in the future. Ask any social scientist or economist how long "rules" of social or economic behavior stay fixed in a dynamic environment. Either we are on the edge of a dramatic change or I am a dimwit, totally full of crap, who is making extraordinary gains in the market as a result. You won't have a firm answer for a few years, if ever. This is all idle guesswork because we really don't know - we just have lots of analysts claiming their crystal ball is still working 100%. Garbage in, garbage out. Look at the hedge funds that just got smoked on bonds because their interest rate models "didn't work this time".