PD, your mom sounds like my real smart attorney friend from Phoenix, who was heavily into tech stocks in 1999. By the way, her husband is a very successful RE attorney, representing one of the largest builders in Phoenix. They just built a $2 million home, have kids in private school, travel, lots of cars, etc. They’re a great family. She’s a stay-at-home mom, with lots of hired help. Money is no object, and I hope he will continue finding work as builders cut back on building.
Anyway, I asked my friend in 1999 why she was buying stocks with such high PEs, and no earnings.
She said, “I don’t want to miss the party”.
I responded, “How will you know when the party is over? Can you get out without losing your money?”
“Yes”, she assured me.
In early 2000, as Lucent went from the $70s to the $90s, she bought more Lucent, and told me what a great buy it was. She knew all about their new products, the potential.
In 2002, she admitted she lost a ton of money. She didn’t get out in time. The market moved too fast.
Many smart people lost lots of money. That’s why I was warning the person on the other thread about buying any stock with a PE of 35.
Your mother is like my attorney friend. It’s already crumbling, and she cannot see it.
Doesn’t she read the papers? Phoenix is falling apart, and this is only the beginning. DENIAL. Your mom is in Denial, because she doesn’t want her house to lose value.