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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (3207)	5/31/2000 1:36:00 PM
From: vampire	Read Replies (1) \| Respond to of 3339

Your defensiveness is only accentuating your ignorance. Noone is saying that Dow 7000 (or 2000 for that matter) is going to occur. I would say there is certainly a chance though (especially the former) - a chance you blow off as ridiculous (which is what you are implying by asking if WW3 would have to occur to see it)

To: The Ox who wrote (3207)	5/31/2000 1:57:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 3339

Michael, i never said anything about Dow 2K. just pointing out a few facts re. Japan. generally speaking, investment manias are ALWAYS comparable. they are always driven by the same set of circumstances, i.e. low inflation, big productivity gains, and a way too lax monetary policy. you would be surprised in how many ways the 1920's were similar to the 1990's...whenever a disinflation period of considerable duration is experienced, asset and credit bubbles tend to form. btw, these periods are almost always characterized by significant technological progress as well (and the resulting productivity gains alluded to above). as for where the Dow could go, i don't think it's really so much a question of absolute levels...the main lesson to be taken away from Japan is imo that secular bear markets are still possible in modern times. it's now 11 years after the Nikkei's peak and it still trades almost 60% lower. you wouldn't have known it in '89...back then Japan and its economic model were the envy of the world. it was assumed as a matter of course that Japan's economic prowess and demographics (sound familiar?) would assure at least another decade of stock market gains. even though stock prices were extraordinarily high by historical standards, those standards were deemed inappropriate to judge the proper valuations of stocks in this new Japanese era. furthermore it was argued that long term investors would come out ahead regardless of how much they paid for stocks, as any downturn would swiftly give way again to prices going even higher. after all, that had been the experience for almost 20 years... alas, reality interfered rather rudely with these assumptions, and the buy-and-holders who bought near the top are still waiting for the promise to be fulfilled... regards, hb