Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Richard Nehrboss who wrote (35544)	11/8/1998 12:54:00 PM
From: Knighty Tin	Read Replies (5) \| Respond to of 132070

Richard, Here is the consensus argument for a bull market and high pe ratios: 1. The Baby Boom generation is investing for retirement and they have secure, well-paying jobs with a lot of money to waste and the level of ignorance required to make stupid gambles at any price. Whoops, that last part is the bear in me editorializing. <G> 2. Interest rates are low. Historically, they are about average, but history is bunk. 3. Inflation in non-financial assets is low, as measured by the new doctored up system of calculation. And even if it takes an turn up, the Congress will pass a law to change the formula again until it is reported as low. <G> George Orwell would be soooooo proud. 4. The Fed can print money forever with no risk of a weaker dollar, higher rates, a fall in the savings rate, declining productivity, or a huge trade deficit. A bit of an oops already on the last three, but we will say they don't matter. 5. The system is obviously solid when it requires stupidity on the part of one whole hedge fund, out of hundreds, to nearly make the entire house of cards collapse. 6. Corporate earnings are growing rapidly. Pay no attention to the fact that even the reported numbers are showing declining growth rates at a scary pace. And certainly ignore the fact that "The Economist" claims S&P 500 eps in the United States are overstated by about 20% due to the scams we talk about all the time on this thread. EPS are growing. That is our story and we're sticking to it. Reality be damned. 7. All smart investors buy and hold. Nobody can name even one successful buy and holder, but we know that this is true. 8. U.S. stocks are the only investment alternative. Yes, 3 years ago we said you had to be in Asia and Latin America. And, before that, you had to own energy limited partnerships. And before that, real estate was the only place a wise person would buy at the top. And before that, gold was the only game in the world for the rest of eternity. And before that, you were an idiot to own anything that wasn't a Treasury Bill. And before that, tulips are not only beautiful, they are a certain winner as an investment at $10,000 a bulb. But those were all false teachings of naughty prophets. We swear by Abbey Jo and Joe Batsinthebelfrya that this religion is the only true one. 9. The internet has changed things so the flow of information is so much better that bear markets are a thing of the past. 10. Things are different this time because the United States is the only superpower militarily. Ignore the fact that Saddam Hussein and North Korea make fools of us at every turn and we seem powerless to react. Or Or that 11. The United States has the only economy that matters. China, well, let's ignore them. And the ECU, well, the fact that their economy is larger and that their currency may be competition for the dollar are facts we will not allow into our valuation models. Wow, I'm going out to buy some stock at the top tomorrow. <G> MB