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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Mark Nelson who wrote (7445)	11/8/1997 3:01:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 18056

I think that probably most people on this thread have already decided that there is nothing wrong with rational self-interest. The only reason anyone gets into the stock market is to try to increase wealth, and the only morality that applies is to obey the laws so that you don't go to jail. If you make money according to the laws and regulations, you are doing so at the expense of other people who also hoped to make money and who are supposed to understand the risks. To raise the issue of the morality of short selling in the middle of the investment game is like stopping a soccer game to discuss whether using an off-sides trap is ethical. There are threads in morality, philosophy, religion, and ethics where these issues can be taken up. At this point the entire stock market is valuing the assets of the companies represented by the stock at about five times their monetary value. In 1982 and in 1974 many companies were valued at less than their monetary value. Unless you are currently holding shares, the only way to profit on this overvaluation is borrow stock and sell it. Alan Greenspan has tried two or three times to remind Americans that this overvaluation exists, and mostly he just gets abuse for having done so. It is probably true that to devote too much of one's life to the stock market is immoral, in that it is damaging to the person who does it. I suspect that most people on this thread, however, have numerous other interests. Was delighted to find that a whole crew of people on the IRPPF (International Petroleum) are mushroom hunters. But I suppose that Dante would have found a place in the Inferno for short sellers--either with the usurers and homosexuals, or else even further down with the fraudulent. Or maybe just on the terrace of avarice in Purgatory.

To: Mark Nelson who wrote (7445)	11/8/1997 6:00:00 PM
From: Jack Clarke	Respond to of 18056

Mark: I also have to rationalize the guilt feelings about "wanting" the market to go down. Considerable pain will be caused, but all we are waiting for is for the market to get back to some semblance of normal valuation so that we may participate rationally by investing in the companies of our great country. It isn't your fault that people buying stocks don't know or care that the price to book value on the S&P is 5. Why would anyone want to pay five times as much as something is worth intrinsically? There has never been a period in history when stocks were even half as overvalued as now which subsequently proved to be a good time to enter the market. We also have to fight the current notion that nobody can be allowed to fail, and that the government must save everyone from their own folly -- Mexico, the banks, the S&L's, Indonesia. Will AG and Rubin buy the falling market back with the taxpayers money? I sure don't know. As someone who experienced the go-go 60's mutual fund mania and watched it end poorly (FLAT DJIA from 1966-1982), I see eerie parallels. It's either the biggest speculative bubble since tulipmania or a NEW ERA! Whatever happens, it should be fun to watch! Jack

To: Mark Nelson who wrote (7445)	11/9/1997 11:00:00 AM
From: studdog	Read Replies (1) \| Respond to of 18056

Mark: I appreciate your viewpoint. It is uncomfortable hoping for a negative market. I don't want a finanicial armageddon either. I am now net short (only a little) but my scenario is a hopeful one. I just think the market is overvalued and ripe for a fall, I believe the economy itself is sound and that companies will still make money and people will get paychecks and deflation will counter inflation. Companies just won't make as much as expected and prices should correct to something a little more reasonable. If S&P gets to the low 800's I will start getting long again. Karl