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.

Pastimes : Bubble of 2000 - How will you call the bottom? -- Ignore unavailable to you. Want to Upgrade?

To: Gut Trader who wrote (2)	9/8/2001 11:48:17 AM
From: joseph krinsky	Respond to of 8

The problem with using past explanations is that they are past explanations. Every time the market reaches a top or a bottom, the reason it turns is always different than the previous reasons because one part of the puzzle always plays a more important part than it did the last time, for some unknown reason. For example, the last time we had a downturn, lets say the tech sector led us out. Well, so now everyone is looking to the tech sector to do it this time because their memories only go as far back as the last time. This time it may be the consumer that does the trick, or it may be the strong housing sector, or it may be something that everyone has just overlooked in giving it enough importance. Unemployment is only bad if you compare it to a time period that was unrealistic. We had something like 3? per cent unemployment?? That was unsustainable. (you can never have 0% unemployment because people are always changing jobs and moving for whatever reason, and companies are always going out of business, so they lay off)) It's like interest rates..Once they reach a certain point they can't go any lower, so the only direction they can go, is up.. I believe they (economists) used to be happy with 6% unemployment. Many of the jobs that were created to get us to 3% maybe shouldn't even have been there in the first place. The dot com explosion maybe employed a lot of people that maybe shouldn't even have had those jobs. They don't now, and that's probably because those businesses were fantasies and in hindsight maybe they should have never been created to begin with. Looking to use charts to explain when the turn will happen is probably doomed to failure IMO. Usually what worked the last time almost certainly won't work this time. The only thing I am sure of is that the market right now is an excellent buy, even if it does go lower. I wouldn't buy the high flyers of yesteryear right now, but that doesn't mean that there aren't some terrific buys out there, right now. An interesting chart: tradetools.com shows the effects of lowering rates on profits and the markets. The markets are getting to the point (IMO) when the "invisible hand" is going rear it's beautiful palm and make it's imprint on the market and it's going to go up, and go up fast. The short interest on all the exchanges is the highest it's ever been, and they're going to have to cover. It may be that they have created a bubble in reverse. And it even may be that the turn may have nothing to do with the reasons for past rises, other than that old collective subconcious decided it was "just time", and everyone starts buying. Then the hindsight gurus will hit the media giving the explanations as to why it happened.