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To: Gus who wrote (4703)	10/13/1998 9:45:00 AM
From: LK2	Read Replies (3) \| Respond to of 9256

Gus and Stitch, do I really understand what I'm saying? I understand what I'm saying, but I don't know if I'm right or not. This is just general theory. I am saying what I believe, however. RE:By Peter Huber forbes.com Stitch, we are talking about the same article, but from different viewpoints. You read the article, and agree with Huber by writing >>>>>>>change is still accelerating, and getting harder and harder to manage. So now what?<<<<< Technological change is accelerating. It would be hard to find many people who would disagree with that. When I said the article was nonsense, I was disagreeing with Huber's conclusion that financial instability and bankruptcies are the basis of increased wealth for the individual investor (assuming he is talking about the average investor, and not a small group of elite superinvestors). I am not disagreeing that we are currently in a period of financial instability. Just checking the massive selloffs in the Asian stock markets will indicate the financial instability that is taking place today. What I am disagreeing with is the simplistic conclusion that financial instablility and bankruptcies are the basis of financial prosperity. Huber writes: >>>>>>>Nonetheless, the diversified investor who can stomach financial turbulence will prosper as never before.<<<<<<<<<<<<<< Huber is saying/implying that the forces of capitalism unleashed will be the means of creating great future wealth (supposedly for the masses, meaning us investors). In the meantime, the bankruptcies and financial instability are the normal process of capitalism. People can say any nonsense they want to, and maybe they even believe some of it. But I have a hard time believing the depression in the 1930's was the means of creating great wealth for the average investor. Or that the stock market losses of Japan, Korea, Malaysia, and the other Asian countries have created wealth for the average investor. Or that the bankruptcies (with the consequent loss of jobs), rioting, social unrest (protests, rioting, looting and rape, in some instances), are either needed or necessary for great future wealth. When stock markets lose 50 to 80% or more of their value, the average investor is not better off. On a simple basis, the average investor has a lot less money. Bankrupticies are part of the system, but they don't improve the outlook for the average worker who loses his job, or has to accept a lower-paying job. Pain is good for the system, as long as it's someone else's pain, and not my pain. That is the implicit idea behind the theory that corrections are a necessary and beneficial part of capitalism. That is why I referred to Huber as a Conan fan. Robert Howard, the creator of Conan, was writing fantasy. But Peter Huber is writing pretty-sounding garbage that doesn't have a solid connection to the real world. If Brazil and South America have a financial meltdown, will you --or I-- be any better off? The only way I will profit from a South American meltdown will be if I've already sold out of the US stock market and gone 100% into Treasuries (and certainly not junk bonds). In the meantime, for the foreign investors who are holding stocks that have lost 50% or more of their quoted value, and the people who have lost their jobs, I don't think they would agree that losing money and maybe losing their jobs is a solid basis for increased prosperity. Just my thinking. Regards, Larry PS: I am not a socialist, or a communist. I think that capitalism is a better system with less hypocrisy. PPS: I also think that Huber is recycling other people's ideas, such as chaos theory, and claiming credit for them as a >>>modest proposal<<< which I think is more egotistic than modest. PPS: I got up on the wrong side of the bed yesterday, and it looks like I'm still on the wrong side today. Apparently Stitch got up on the right side, and that is why he found positive things in the Huber article. To be honest, there are some nice ideas in the article, but I don't give Huber much credit for them, or for the way he mangles those ideas.