teknobucks
01-09-2005, 03:25 PM
article cut off the end of a long piece byRostenko:
I don’t know where 2005 will close out. Heck, I don’t even know where it’s going to open. What I do know is that the trend is up, stocks have been moving higher for a couple of years and that we’re in the midst of another finely Fed-orchestrated asset bubble. Until someone devises a methodology for accurately measuring lunacy, there’s no way to forecast how high this bubble can go. The "trend is your friend" and for now, the trend is upward.
Yes stocks are overpriced. Yes the dollar is in trouble. Yes the budget deficit is huge. Yes the current account deficit is a gaping chasm. But all of those factors have been with us for years. The stock market decoupled from economic reality some time ago and why should we believe that’s going to change anytime soon?
Have I grown horns and become a raging bull? Hardly. I’m not bullish. I’m merely acknowledging the obvious: stocks are in an uptrend. When stocks are going up, the way to make money is in buying them. Being long.
But there are times when buying stocks is less risky and then there are times like today when buying stocks is very risky. The nature of a bubble is such that no one knows when it’s going to end. Sometimes, ok often, they end abruptly. That makes bubbles very risky. And that makes "investing" in the stock market anything but. At this point it’s all about speculation and grabbing the last chair before the music is turned off.
In the early stages there’s nothing that differentiates an imploding bubble from a simple correction. Those who figure out the bubble is over take their profits, sit back, count their money and wait for the next Greenspan bubble. Those who don’t figure it out as quickly take their losses, sit back, count their remaining money, and wait for the next Greenspan bubble.
What I’m getting at is this: it’s an up market. Call it a bull, call it a huge bear market rally, call it Ronal McDonald, but it’s going up. It’s a bubble and the day traders are beginning to make headlines again. Speculation is back in vogue. There’s money to be made, but only those who hit the exit doors first will walk out unscathed. While there’s no telling how high stocks can go, at some point the overwhelming disparity between fundamental economic conditions and stock valuations WILL come back into focus and the party will end, most likely rather abruptly.
Until then keep an eye on the exits and have a good holiday.
Mark M. Rostenko
I don’t know where 2005 will close out. Heck, I don’t even know where it’s going to open. What I do know is that the trend is up, stocks have been moving higher for a couple of years and that we’re in the midst of another finely Fed-orchestrated asset bubble. Until someone devises a methodology for accurately measuring lunacy, there’s no way to forecast how high this bubble can go. The "trend is your friend" and for now, the trend is upward.
Yes stocks are overpriced. Yes the dollar is in trouble. Yes the budget deficit is huge. Yes the current account deficit is a gaping chasm. But all of those factors have been with us for years. The stock market decoupled from economic reality some time ago and why should we believe that’s going to change anytime soon?
Have I grown horns and become a raging bull? Hardly. I’m not bullish. I’m merely acknowledging the obvious: stocks are in an uptrend. When stocks are going up, the way to make money is in buying them. Being long.
But there are times when buying stocks is less risky and then there are times like today when buying stocks is very risky. The nature of a bubble is such that no one knows when it’s going to end. Sometimes, ok often, they end abruptly. That makes bubbles very risky. And that makes "investing" in the stock market anything but. At this point it’s all about speculation and grabbing the last chair before the music is turned off.
In the early stages there’s nothing that differentiates an imploding bubble from a simple correction. Those who figure out the bubble is over take their profits, sit back, count their money and wait for the next Greenspan bubble. Those who don’t figure it out as quickly take their losses, sit back, count their remaining money, and wait for the next Greenspan bubble.
What I’m getting at is this: it’s an up market. Call it a bull, call it a huge bear market rally, call it Ronal McDonald, but it’s going up. It’s a bubble and the day traders are beginning to make headlines again. Speculation is back in vogue. There’s money to be made, but only those who hit the exit doors first will walk out unscathed. While there’s no telling how high stocks can go, at some point the overwhelming disparity between fundamental economic conditions and stock valuations WILL come back into focus and the party will end, most likely rather abruptly.
Until then keep an eye on the exits and have a good holiday.
Mark M. Rostenko