JWM , I could expound upon my posts, but they might be too long already.
Many people on this board are well educated and experienced, regardless of their opinion or whether they are a bull or bear.(I think that you and I agree about the overall economic risks)
The fact is that MANY average people have made a substantial anount of money, either on paper or in reality, because they got LUCKY.
They didn’t follow any traditional theories. They just bought when they could, regardless of market timing.
When a $90,000 house brought in $900 a month rent, I was a buyer. When the house doubled or tripled and the rent went up 25%, I was out, with a happy profit, and invested elsewhere.
I never intended to hit the top of the market.
The ones that bought at 2002-03 prices did pretty well, but only by luck, IMO. 2007 market could have been 2004 instead.
My point is that common sense and economic theory do not hold up when you have so many players in the game that don’t have the same education or experience.
The stock market is the next unlevel playing field.
People are throwing piles of money into funds without understanding what they are doing and the risks, they are sheep following blindly.
They don’t know the difference between P/E, P/S or Market Cap. Some are getting lucky.
When the vast majority of people are in and giddy and happy about a market, I’m pretty much out.
I’ll gladly sacrifice the potential extended gains, so I can sleep at night.
When people are scared, afraid to buy and think that the world is coming to an end, my interest is piqued.
You can get rich in value stocks buying when the news is terrible and it looks like the company is going out of business compared to what you can make when the stock breaks above the 200 day MA, and you are looking for a 25% gain. It may have already moved 200%-500%. It’s not unusual at all, but most people only know to buy the highs, and are scared at the lows.
I’m sure that you know that we may be too conservative for our own good, or at least to want to participate with the sheep.
