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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (126580)	12/1/2005 2:03:21 AM
From: Perspective	Read Replies (2) \| Respond to of 209892

Wouldn't dare say markets are rational! No, I said that the rational expectation should be for an extension of the bear, not for the secular bear to be over at the 2002 bottom. I wouldn't dare say that the market would do what was rational, but over the really long haul - years - it ultimately does what it should. It tracks earnings, it rewards successful companies, punishes losers, and excesses eventually revert to the mean. Investing is all about probabilities. Risk-reward ratio is everything. Knowing a potential reward exists is irrelevant without understanding the coincident risk level. Sure, the market may average 7% or so in nominal terms for the next ten years, but it should be considered a less than even likelihood given the historical record of secular booms and busts. More likely is a negative return for another ten years or so. I'd call that a better than even probability. BC