"Conventional wisdom" says you can't beat the market (which is a myth) so "experts" tell us we're wasting our time and money trying yet we, as a society, still are told to listen to what economists have to say when their abilities to accurately forecast the future are questionable.
It's not a myth... 90% of traders cannot do it, and you call it a myth? This should be understood statistically. That does not mean that you cannot beat the market, but that the majority will fail at it. Even the biggest (once) in this business failed. Why? Because trading is a very emotional activity and people are very bad at controlling their emotions and thinking rationally when faced with solving problems under uncertainty. That's why you have wars and stupid wars at that, among other things. Same reason.
Would like to add one oberservation to the discussion. Believe there is great opportunity to be had in the non-U.S. housing market - particularly in countries with large natural resource based economies. These may be great investments.
I was not trying to beat the market, per se. I am trying to provide an insight into some macro events that may affect our economy and trading horizon. I would not try to trade on this prognosis because that would be investing, NOT TRADING, but I would definitely use this measure as a barometer of the market. My model may never be correct but that is because I am a subscriber to "Bounded Rationality" and the fact that I will never possess any extant info at any one time. Information for all intensive purposes is gathered serendipitously and any conclusions made beforehand are known to be false "a priori." So take my efforts for what you will, but I was just trying to provide some perspective given the current market opinion...
I thought I read somewhere that stock market bubbles only form once every few generations due to people learning from their mistakes. Now we just had a huge bubble pop, aka the Naz, so how can another bubble form just a few years later? Maybe that's why you say the DOW will go to 15,000? because that bubble didn't pop yet? I want to know has there ever been a second bubble form in any type of instrument after the first bubble has popped in the history of mankind? Keep in mind that bubbles aren't only limited to stock markets (tulips in Holland, land in Japan).
Exactly, how do we know that we already experienced the first bubble. Maybe it was never a bubble to begin with and that is for future periods to experience. This is my whole point about perspective...
The originator is right, anybody that knows the business cycle well knows where we are and where we are going. People have been complaining about the manufacturing sector in the US shrinking as "jobs get sucked overseas" for decades, guess what? Our manuf. sector is about the same size, dollar wise, as it was in 1980, it did not grow but it did not disappear either. The falling dollar is exactly the thing the manufacturing sector needs, when Raegan got the dollar down to about 85 yen we were exporting to Japan like crazy and we went into a boom, that is right where we are going again. Heed my words, I know these things
This probably doesn't belong in this thread, but I just noticed that the S&P Midcap made an ALL TIME HIGH today. The reason I bring this up here is that perhaps the entire stock market bubble didn't burst yet and that a bubble still does exist in some areas. While I think most people would agree that the Naz bubble burst, maybe the DOW/S&P bubble didn't burst yet?
I said : 06-24-03 12:15 AM 2008 the last bubble mania : what will you do ? "This will lead to 2008 and it could just coïncide with the last stock market bubble I told you it could happen around that time according to my model with a target of 16000 (at the moment of calculation for Dow Jones). This is coherent with the beginning of demographic inversion curve and historically from fundamental point of view stock market has always followed demography." http://www.elitetrader.com/vb/showthread.php?s=&threadid=19167&highlight=2008
Of course, this is not new prediction, the "new economy" concept exists since 1929 at least and who can forget the famous quotes from the yale economist FISHER - he so much believed in his own idea that he ruined himself by keeping his stocks - in New York Times: http://home.golden.net/~pjponzo/1929-crash.htm Wednesday, October 16, 1929 FISHER SEES STOCKS PERMANENTLY HIGH Yale Economist Tells Purchasing Agents Increased Earnings Justify Rise ---------- AYRES SEES MARKET AS 'CREEPING BEAR' Fall of Prices Began Months Ago, He Says, but Was Hidden by Rising Averages DECLINE IN AUTUMN USUAL Recession This Season About 14 Per Cent, Against Normal Drop of 9, He Reports ---------- MITCHELL ASSERTS STOCKS ARE SOUND Banker, Sailing From Europe, Says He Sees No Signs of Wall Street Slump Tuesday, October 22, 1929 FISHER SAYS PRICES OF STOCKS ARE LOW Quotations Have Not Caught Up With Real Values As Yet, He Declares ---------- SEES NO CAUSE FOR SLUMP ---------- Economist Tells Credit Men that Market Has Not Been Inflated, But Merely Readjusted