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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (49621)	1/3/2002 5:25:29 PM
From: Wyätt Gwyön	Respond to of 54805

Gold to the People ... Mucho and John cannot disagree with anyone reading those essays hey, not everybody's a goldbug. re: high equity prices, as i said before (maybe somewhere else), there is always the possibility that we have reached a "permanently high plateau". since investing is a balance of risk and reward, this PHP scenario simply requires that the R/R equilibrium be skewed to the high-risk end of the scale (where reward is necessarily low). no law of physics can require it to revert to the historical mean--all that is broken is a law of logic (and emotions: can Greed keep Fear in the dungeon forever?). it is really a question of how patient people can be in buying into what would seem to be an irrational R/R proposition. can a contrarian exploit this? that is, short it to advantage? who knows--many seem to have gone bankrupt proving the intellectual correctness of their bearishness. i have no such intention, and thus do not short. my impression is that people normally look at prospective investments as a choice among potential rewards. in keeping with the compass of expected returns, i do not see a great difference among what is available in terms of this metric. that is, i do not see the prospective rewards of owning Nasdaq stocks (as implied by their long-term expected returns) as being any better on an absolute basis than the rewards of buying, e.g., 10-yr Treasurys. but i do see great variation in the complement of reward: risk. so i have found it useful to make a mental shift from "shopping for reward" to "shopping for (low) risk". at some point, i think there will be a chance to shop for reward again.