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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (72116)	10/16/2006 8:43:19 AM
From: Rarebird	Read Replies (1) \| Respond to of 110194

When Hussmann refers to the Market as "defying gravity" and being "modestly favorable" from a "speculative" point of view, it makes me think of many Market participants who are betting on the "Greater Fool Theory." That is, they are buying with the expectation that there are greater fools available to buy stocks at higher prices. Maybe there are, maybe there aren't. The stage has been set for another one of those bubble tops, this time in the stock market. And, they're dragging in all the reluctant bears (like Hussmann) who have been convinced the market was heading much lower, turning them into call buyers (on dips). It's always amazing to see rationality thrown out the window at market tops. (Yes, I know, Hussmann will still be 75% hedged). And it's hard to pinpoint the exact top for that very reason: manias will go well beyond any normal bound of rationality.