1999: The internet is the most revolutionary invention in history and will dramatically change every aspect of human interaction. We are in an entirely new paradigm now where 'old order' metrics such as earnings have no meaning. For the foreseeable future the land grab is all that matters. New economy stocks will continue their irrepressible upward trajectory for years to come. 2013: The Fed is the most powerful player in market history. Its commitment - backed with almost limitless trillions of printed dollars - to ensure the stock market never plunges puts us in a whole new paradigm. No one with any sense dares to fight the Fed. Stocks will continue going up for years to come. It's different this time, right?
Yes. The internet created wealth. The Fed's actions will eventually destroy all wealth in the US and maybe other places as well. The stock market will rise, but inflation and currency debasement will end up bankrupting nearly all citizens.
The internet did indeed create wealth. The <i>internet stock bubble</i> destroyed wealth on an unprecedented scale. My point was that near 100% bullishness in 2000 was justified by the internet meme. Today it's the Fed meme. Same hype, different meme.
The internet itself created wealth... internet stocks and how they are played per individual investor/speculator are a different matter. Internet stocks didn't universally "destroy wealth on an unprecedented scale".. Take Mark Cuban, for example... or my neighbor who cashed out in a timely fashion and paid cash for a $6.8 Million house.
'Nothing important has ever been built without irrational exuberance'. Meaning that you need some of this mania to cause investors to open up their pocketbooks and finance the building of the railroads or the automobile or aerospace industry or whatever. And in this case, much of the capital invested was lost, but also much of it was invested in a very high throughput backbone for the Internet, and lots of software that works, and databases and server structure. All that stuff has allowed what we have today, which has changed all our lives. â¦that's what all this speculative mania built." ---------------------------- Now the question is, "What is so important?"
Internet stocks... which "destroyed wealth on an unprecedented scale"... did so only to STUPID investors. If you've got a BIG position... internet stocks or other.... and if you don't play with a reasonable stop... you're just "asking for it"... huge losses primarily being a result of your own stupidity. Hard to have sympathy for stupid stock players.
Interesting you should mention stops. The problem right now is that everyone thinks the Fed is providing the stop for us, no?
"Fed put"... yes. Still, if you're a trader with "half-a-brain", you'll be trading with a stop... after all, "shit happens".... Fed put, or not.
I think my point has become obscured. In 1999 everyone thought the stock market would go up forever because of the internet. Today everyone thinks it will go up forever because of the Fed. WHAT IS THE DIFFERENCE?
Asked and answered. You've asked the question TWICE... don't like the first answer so you ask again? You gonna keep asking until somebody responds with something which suits you?