SmoothTalker said:
I have to disagree for the most part. Yes of course the media is sensationalist, but things are much worse than you seem to think.
While you bring up the tech bubble, that really wasn't that bad. In fact, that's part of the problem, the landing was far too soft because of the 1% interest rates and the skyrocketing real estate values that created the illusion of growth. (Economy growing from people spending money they don't have).
This time around we don't have either of those things to soften the blow, and the world economy as a whole is slow, which isn't helping. Not to mention at that time the country didn't have two wars to pay for.
I agree it was too soft, the FED was delaying the inevitable by cutting rates so low, and putting so much money into the system.
But end of the world talk is wall street panic. The market is a manic depressive. The real world is no where near as bad.
You think about all that's happened in the last 100 years...depression, WWII, Cuban Missle Crisis, Nixon resigning, etc. And things keep marching on. Music, and night clubs, people keep living. The variance in the saving rate, interest rates (they've been as low as 1%, 2% and as high as, 18, 20% in late 70's?). The variance in budget deficits and surpluses. The variance in trade.
Yet homeownership has been steady. Most people have jobs.
The latest collapses of the Wall Street banks has made me question the "standard wisdom" you get about stocks. It's all complete nonsense, why would anyone believe it? Looking at all these ratios, or looking at volume. Or the mortgage brokers. They made dumb bets, why would you have to look hard for something that's less important?
It makes me question corporate practices. How many companies imploding had naming rights to sports stadiums or sponsorships. Makes me question "marketing". Like Wamu, they try to be quirky and cool. Shouldn't you pay more attention to their balance sheet and their financial health (your ability to get your money back), than worrying about their marketing or some gimmick?
On their website right now, they say "Get Organized. You can get statements online saving clutter and trees". Gotta save the trees! Gotta be cool and environmental. While their stock is $2, about to go bust or get bought out. It's insanity.
You're being lulled to sleep with marketing jingles and images. People live in this hypnotic state, clueless about what's going on behind the curtain.
Makes me question the information you get, or don't get about stocks.
The standard wisdom is, you have a stock terminal or screen, and you're looking at stocks all day. And you use the same techniques on all of them. You click on Walmart, and you get the 200 day moving average, or a trend line. Then you click on Bear Sterns, and you get a trend line or moving average. But why would it be the same, they made terrible bets and were over leveraged. You're not going to pick up their decline (the stock went from $70 to $5 in a few weeks), using past analysis or trend lines.
And there's all these books on stocks, thousands of them, and they all treat stocks the same. Looking at the same trends, and the same analysis. They're at Barnes and Noble now, written by "experts", and it's all junk.
