greghaught wrote:as for P/E's, you all really need to get over fundamentals. of course the MSM is going to do tricks with those.
and you really need to try and resist hype and emotion. emotion is a red flag.
i understand your outrage. the system is rotten to the core, but try not to fall into the trap of condemning anything that yields a large profit for your archenemy or a large loss for your hapless friend, or that doesn't seem to be cooperating with your opinion or fundamental model.
I think you make some good points about not gettin too emotional about these issues and not trading based on who you dislike.
But...ultimately I think that as a little guy, which I assume all of us are in comparison to GS and the other powers-that-be, it is equally as foolish to jump on board their bandwagons believing you can ride them to riches. It is important for me to know what the truth is and that means understanding that when a person says, "the average market P/E is 15 and anything under 10 is undervalued" and then goes on to say that the P/E is 15 when in truth it is 160 and won't be under 20 again for several years, even based on the optimistic estimates - http://www2.standardandpoors.com/spf/xl ... EPSEST.XLS
- he is lying to me and eventually that lie will play out and burn me if I buy into it.
1929. When traders could legally influence the price of shares higher and did, many saw these rising prices and bought, believing they too would benefit. Likely most of those late buyers held on and held on and held on at the insistence of the "experts" and eventually sold sometime in 1931 or 1932.
1980. Gold has had a tremendous run to historic highs and everyone KNOWS that you can't go wrong buying it. All the "experts" are saying, buy, buy, BUY!
2000. Tech is on a tear and all the "experts" insist that this time it is different and that we are living in a new world. We all know what happened.
2006. Housing is booming and we all know that housing prices never go down bcause the "experts" told us so. We all know what happened.
2007-2008. The stock market is at an all-time-high and the "experts" tell us that our economy s fundentally strong. Of course a three year old can see that this is not the case.
2008. Oil breaks through $100 and everyone says that is crazy...until it breaks past $125 and then everyone, including the "experts" (I specifically remember GS call for much higher prices) claim that we are in a new era of "peak oil" and we all have to buy, buy, BUY!
2009. Despite the government racking up huge new deficits, huge overcapacity in just about every area of the economy and a stock market that is obviously overpriced,even for a good economy, we are told that this was all just a bad dream and that things really will be alright, after all, the banks are profitable again....
Yes, most important of all is to look at the facts and understand that while people can manipulate the markets for a period of time, fundamentals will ultimately win out. Trying to jump aboard the Goldman train will only result in the little guy getting run over by that very same train as he gets pushed off for breaking the rule of "no free rides", even though that train is loaded down with the very money taken from that little guy as he was told it would save him and "the system".
As long as we understand that we can't fix the system by ourselves, that distrust of powerful people and institutions can be a very valuable thing. Understanding how they operate can be even more valuable. Assuming that you can play their game or run with them - to me that is suicide.