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To: Victor Lazlo who wrote (123643)	4/13/2001 11:39:01 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 164684

>>No Skeeter, what I'm saying is that we will never have rational mkts<< in a sense, yes. but that doesn't mean that insane bubble valuations is the outcome. what i meant by rational markets are non bubble type markets which are the norm. bubbles and severely depressed stocks are the minority. i am not saying that we see markets stay at a mythical fair value. that is not what i mean by a rational market - this is obviously impossible and i didn't think it need even have been said. again, nobody knows exactly what fair value is. this ought to be obvious and self evident, too. however, there are rational bounds to both the upside and down side and the markets are in those bounds MOST of the time, although not recently. a rational market is not a market where everyone agrees prices are good. reasonable people will always disagree on valuations. rational markets are "non mania markets." or, another way, "non-irrational markets." again, going back through history, most of the time the us markets have been rational by this definition - one i thought was obvious - but wasn't. think of it this way... has the whole history of the stock market been one of a great big mania? absolutely not. in fact, manias on the upside and down side are the minority. >>If we did there would be no or very little risk, and thus no or very little opportunity for reward.<< not true. stocks would trend toward the growth of the economy and if one had SKILL one could pick faster growing segments that are undervalued b/c others don't see the opportunity. yes, the winners would be those with foresight and skill mixed with good fortune. however, most folks want the market to be a casino now b/c their GREED has taken over. 15% annual returns are for dolts, right. we all want som high octane gains, baby. master of the universe gains! i would aargue the market shouldn't be a casino - las vegas is for that kind of action. lay down $1 million and bet black. get it over with. >>Some academics think we do have rational markets already. But in my argumentative view of things, I do not think that is true.<< i know. every bubble requires that people check their intelligence and follow the herd. the herd must be right. if a stock goes up yesterday then they must be doing better and nit should go up today (no wonder people buy on price movement and can't even read an income statement or a balance sheet!). these academics, by their own theory, add no value whatsoever. well, their theory and my theory at least agree on point ;-) >>I like bull mkts; I do not like bear markets. But without bear mkts there could be no bull mkts.<< the chicken or the egg ;-) you know fast money means fast losses. i avoid the fast losses by not buying high. of course, i'm in the minority. then again, i don't want to be the majority when that means fiscal insolvency, stressed relationships and feelings of bad being. the size of the bust tends to be equal to the size of the boom. if you don't want manic turbo busts then avoid manic turbo booms.