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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Liatris Spicata who wrote (14413)	2/28/1998 3:16:00 AM
From: paulmcg0	Read Replies (3) \| Respond to of 94695

[I disagree with your assessment that "the stock market is a form of gambling"] The idea that Wall Street is a form of gambling has been advanced before. For example, Nicholas Darvas wrote a book titled Wall Street: The Other Las Vegas in the 1960s, that was reprinted in the 1980s. (This book is currently out of print though). What else would you call the current market mania, besides gambling? Particularly when you consider the ridiculous prices being paid for the most popular shares compared to the company's economic fundamentals. People who buy stocks with high P/E ratios and low (or non-existent) dividend yields are gambling that someone else will pay more for the stock than they did. I'd say it's gambling when the market valuation on Wall Street exceeds the gross domestic product of the U.S., by 40% as it does now. I used to play the stock market, and I have to confess that I knew I was gambling at the time. I had some losses but, overall, I came out ahead. I used my profits to help pay off my debts. I recommend that other people do the same, while they still can. The big question of course is: How long will the market continue to go up before it corrects sharply? It could be another year, or, the stock market could crash on Monday. I don't pretend to know when it will happen, but bull markets like this one have inevitably been followed by steep declines. Paul McGinnis

To: Liatris Spicata who wrote (14413)	2/28/1998 10:41:00 AM
From: epicure	Read Replies (1) \| Respond to of 94695

>I, as an investor, own part of a corporation. I hope I will profit from my investment, but I must realize there are risks associated with owning a business< Alright Larry, so you own this tiny meaningless fraction of a business. In some case (YHOO) people are willing to pay upwards of 75 dollars a share, for a part of the business that makes NO money. So even though a company exists, of which they can say they own a fractional part, they really own nothing. How is that not gambling? And not just gambling on one thing, mind you, but speculating on the health of the company, the strength of the economy, the stability of the global economy, and on and on. Even a company that is making money, take AOL, is only making 19 cents a share, yet people are willing to pay a hundred and nineteen DOLLARS a share for it. Those people are gambling that somehow, someday (and just when will that day come) AOL will be able to grow itself at such a rate that someday it can justify this crazy valuation. It is the nature of people caught up in manias to get upset with those who point out the irrational qualities of the situation. And the gaming tables are not "purely" a matter of luck. Clearly you do not understand the card games that flourish in Vegas, where a mathematically gifted card counter, with a good understanding of statistics can make a decent living. And what about horse racing, where handicapping is everything? There is a pursuit where luck certainly isn't everything. Granted you don't "own" anything, but I would argue that with most overvalued companies you don't really own anything either. And as you know crime syndicates have realized what a lucrative business the market is, and have moved in to fleece investors. What does that tell you?