Skip to comments.WHO IS RESPONSIBLE FOR THE YO-YO STOCK MARKET (VANITY)
Posted on 04/27/2004 1:52:06 PM PDT by JesseHousman
Just why is the stock market acting like a yo-yo out of control?
I grow more certain each day that we are being led down the garden path by a bunch of know-nothing 27-year-olds with MBAs that are capable of seeing only quarterly results, not what the subject company will earn this year, next year or the year after.
When I hear some overeducated boob with no business experience espouse "Company A" did not meet his expectations for the quarter, then downgrade said company, I cannot help but wonder if these guys have ever spent any time in the real world. I wonder, while in college if they ever read Benjamin Graham's book "The Intelligent Investor," which became required reading in most "B" schools. The answer is obviously "no."
To regain market stability and investor confidence, one of the many things that must occur is long-range thinking, not just what is happening in 90 short days.
How dare these overeducated, under-experienced boobs downgrade a company that did not meet their estimate.
An estimate is just that --an estimate--which is usually wrong. Unfortunately, the big investment firms are populated by these dullards and they are the ones causing IRAs and other investment vehicles to continue proceeding down a bumpy road that needs repaving!
The situation flows into our public schools and government as well.. Who are these people teaching our children? LIBERALS with corrupt agendas geared to convert innocent children that will become the next generation of misfits and druggies.
Remember what Hillary said.........It takes a village.. . of What?....gays and misfits.
The Democrat move is on to register the generation that has been brainwashed for the last decade or two to VOTE.
And, just btw, Mr. Soros does indeed know how to manipulate mkts, although manipulating both NYSE and NASDAQ would probably be a bit too much for even HIS pocketbook.
The millions of people who invest. The "yo-yo" averages out with respect to value over time. People who try to get rich quick in the stock market tend to get hosed. The rest of us, who recognize that market volitility is a fact of life, and who don't act on every whim or rumor, tend to do just fine over time. I am still buying just as I have done with regularity for the past 20 years. I intend to keep buying until the time when I will need to tap these assets, and maybe even beyond that time.
Let's all take our tin foil off and revisit earth. It's true that a rich guy can change market prices - so can a poor guy. You can force prices up by offering to buy at a higher price, and you can force prices down by offering to sell low. (Am I going to fast for anyone here?)
But forcing up prices up when you're buying is what you don't want to do, but you have to do it in order to buy. The big guys have some advantages but trading stock without adversely affecting market prices is not one of them. Us little guys can have a much higher rate of return then the big guys. They may be rich but they can't double their money like we can.
If anyone knows for sure that Soros or anyone else is selling stocks at artificially low prices to drive down the S&P500 just to hurt Bush, please let me know and I will happily buy all I can. And if I help Bush by driving up stock prices, that will be good too.
BTW SAJ, great book!
Any questions about things (I've got a feeling that I wasn't sufficiently clear on a couple of points), just ask.
I have, in spite of the imbeciles who rate good companies. The typical brokerage clod (with his MBA) is lucky to be making $100M/year and will never be a multi-millionaire (which doesn't mean a hell of a lot these days). My point is that these "raters" aren't even pointy-headed geeks or eggheads; rather they're just plodding along to make marginally more than they would managing an Outback Steakhouse location.
As far as the asset management types are concerned, the first thing an investor should ask them is "are you wealthy?" If not, you don't need him.
I don't have an MBA, but I do have an MS and a PhD and I did read the book that B schools fail to use nowadays.
IOW they're just like us. But what we got that they don't is that when we rate companies (using the same data that they have) we can immediately bid on our favorites, whereas they have to turn in their ratings to the boss, show up for a staff meeting, and argue with a cranky admin officer.
I like to use ratings as a contrary indicator-- I buy up companies with good numbers and sell after the ratings uptick.
The reverse of this procedure is the essence of the strategy putatively used by the (mythical, in my view) so-called 'Plunge Protection Team', of Bent Willy's days.
Either strategy is doable, to the buy side or the sell side, provided only two things: 1) that the timing is reasonable -- doesn't have to be spot on, merely reasonable, and 2) that our villain (presumably Soros here, but any big player MIGHT be the villain) teams up with other big players to keep the ball rolling for a few days or couple of weeks. The idea is to spook the funds -- the little player simply doesn't matter.
The only wild card, from the villain's standpoint, is: ''What action(s) might the U.S. gov't take to wreck my plan?'', and this is indeed the wildest of wild cards. Gov't hasn't played by the ''rules'', whatever they may be, in such panic situations since at least the coffee market of 1919.
Best to also ask if the wealth was made by the individual. Note to investors, Investing in the market today means acceptance of the inherent risks of terrorism.