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Strategies & Market Trends : The Bird's Nest -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (1484)	5/18/2007 3:35:03 PM
From: clutterer	Respond to of 15232

very good max...think you made a wise decision...."champagne capitalist liberals"....man that was a mouthful...have to read thru that again <G>

To: LTK007 who wrote (1484)	5/18/2007 3:49:33 PM
From: ajtj99	Read Replies (2) \| Respond to of 15232

Max, I don't believe the markets are any less rational or irrational than they have been during the past 400-years. You may recall Tulip Mania, for example. There are always periods of extreme optimism followed by periods of extreme pessimism. The only constant seems to be the cycle from one extreme to the other. Humans are still involved, and markets reflect the actions of human emotion as they always have. Reversion to the mean has always happened, but it doesn't always happen as quickly as people expect. The extreme optimism of 1966 gave way to the extreme pessimism of 1982, for example. If you break the market down to it's basics, it is just a system of supply and demand. As long as there is demand for stocks at incrementally higher prices, the markets will rise. When demand is exhausted, prices will fall. One of the aspects of the supply/demand equation that is little noticed (except by dvdmogul, who trades by it) is the reduction of shares outstanding. When you take away supply, either by acquisitions, leveraged buy-outs, or stock repurchases, the stock and market will rise to reflect that situation. The amount of stock taken out of the market combined with the relative weak IPO stream the past few years has helped push up share prices. As for your label of me, Champagne makes me burp too much. I prefer Scotch or Diet brown stuff. Capitalist, yes. Liberal, no. Probably centrist, like most of America. So, to amend your label, Diet Brown Stuff Capitalist Centrist is better suited to my tastes, so to speak. For example, I'm all for building more prisons, but only if they house celebrities, reality show participants, select athletes, as well as anyone who hit more than 50 home runs in any year in the past 15-years.