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To: Steve 667 who wrote (26006)	5/28/2004 4:05:17 PM
From: Bargain Hunter	Respond to of 60323

But in 2000 a truly rational investor would never have been able to justify the prevailing prices based on discounted cash flow, so wouldn't have bought. We traditionally distinguish between investors and traders, but we also need to recognize that some portfolio managers form another distinct category. If they have a commitment to keep most of the portfolio invested, then they cannot act like true investors.

To: Steve 667 who wrote (26006)	5/28/2004 4:18:50 PM
From: Charlie Smith	Read Replies (2) \| Respond to of 60323

Steve, Over a time period of about two years, "the market" is driven by emotion (greed and fear). Literally anything can happen with share prices, as the period 1998 - 2000 demonstrated. Over a longer time frame, economics wins out, and this is the reason I invest. If I can figure out what a company is worth and buy it at a reasonable price, I'll be okay. BTW, what I do is as far from "academics" as you can imagine. I run real money (FPCGX) with real clients attached. When I screw up, I get fired, unlike many in academia. Also, most of what passes for knowledge in the investment world in the form of "modern portfolio theory" is useless. charlie