most serious investors I know stayed away from motgage backed securities and intuitivly high risk. Most people understood the sub prime prices were inflated to allow the first bank to sell off higher.
The right now market is being driven down by the government policy.
not whims of the market.
Right now it is a matter of picking the companies that will be around in 5 years or 9 years.
Assuming Obama can not or can duplicate his election.
Wall Street operates with a one year time horizon or less (the next bonus). Since those bonuses can be 100’s of thousands, millions, tens of millions, or for the heads of companies, hundreds of millions, one bonus is life changing and they’ve made their fortune. So there is no rational reason to worry about a crash that won’t happen this year.
The market is being driven down by the fact that global demand is cratering, the debt overhang is too big to sustain, and earnings are going in the crapper.
It’s also being driven down by all the lying bailouts, fake stimulus, and the lack of holding anyone accountable for the blatant fraud in the economy that’s occurred over the last 8 years.
My admittedly limited experience shows that even the best funds and the best managers only hike themselves a few points above the index, which is trending down down down. If it were otherwise, investors would “swamp the boat.”