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Investment Analysis Clubs / The BMW Method
|Subject: What a Jerk!||Date: 9/7/2007 5:40 PM|
|Author: BuildMWell||Number: 26857 of 41511|
Today, the market dropped like a stone to a large degree because Alan Greenspan ran off at the mouth. He needs to learn to keep his trap shut because his thoughts are always used by Wall Street to over-sell the worst case scenario. Let's take a look at the financial guru's ideas:
"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly [the bank panic of] 1907," Mr. Greenspan told a group of academic economists in Washington, D.C., last night at an event organized by the Brookings Papers on Economic Activity, an academic journal." - Alan Greenspan
For the whole story you may go to:
Here is what I think. I agree 100% with that Mr. Greenspan said. He is absolutely correct, the behavior of the market is reminiscent of all of those previous catastrophes, but is it really the same? I say it is very different in almost every way...except for the silly volatility. Today is another example of the same thing and I blame it on Greenspan's mouth. The whole thing is gamesmanship by Wall Street, not the failure of the underlying strengths of our economy or over-valuation by the brokers.
What Greenspan is looking at is the volatility of the markets, not the low unemployment, the 50 year low Treasury Note rates, low inflation, high corporate profits/earnings nor the underlying growth in the economy as a whole. Nope, he just looked at the volatility and said he is reminded of the land-boom collapse of 1837 and the bank panic of 1907. What a crock!
Please do yourself a favor and read up on the 1837 crash and the panic of 1907...what we are seeing today is nothing like either of them except for the volatility stirred up on Wall Street by over-selling any story. This particular one is using Greenspan as their basis and it is more of the exact same thing! A bunch of Wall Street BullS#*t.
By the way, the 1837 crash and the panic of 1907 were both created by a pile of Financial manipulation and Wall Street BullS#*t. That is what you will find when you read up on the real story. Both were extreme cases of market manipulation.
The crash of 1987 was also completely different with stocks hyped to record highs. Today, the market is supported by record high earnings and a growing economy. Look at the 1987 "crash"...not many months later the market was back making new highs again. The market had been depressed for almost 18 years and finally reversed trend in 1982. The growth took off and Wall Street quickly hyped the market too high too fast. What is that except manipulation of the buyers? The market needed a correction and it got one. That is not what the market needs today because it is right on the sustainable growth curve...take a gander:
Check out 1987 on that chart while you're at it. Look how the market fell right back to a sustainable growth rate after that little blip. Was that a real crash? Or, did the pros on Wall Street sell the idea to enough people to get the market moves they wanted to see? I know what I believe.
Also, check out the Greenspan reference to 1998. There was a correction, but look where the market went after that. We were already is a bubble in 1998 and the correction merely slowed the rate of increase. The problem back then was in the international financial markets and Wall Street used them to stir up a contraction. But, what does that have to do with what we are seeing 2007? I just see more manipulation of any news by Wall Street. So, I agree with Greenspan...all of these man-made catastrophes are connected by a common thread and it has nothing to do with reality.
I think Alan Greenspan should spend some time showing Mike's BMW charts to his friends. That would tell the true story much better and it would stop the silliness on the street. Mr. Breenspan has allowed himsoef to become a big piece of the manipulation. He needs to stop that silliness.
I think this is a perfect oportunity to pick up some bargains. Mr. Market is having a sale and we need to be shopping for underpriced securities. Remember, for every seller that these gloom and doom stories create, there is a buyer who knows what he is buying and why.
In a sad sort of way, I guesswe should thank Alan Greenspan for providing such a great opportunity. However, I feel sorry for the suckers who were manipulated into selling great companies at their low price. That is just wrong, but that is a part of this game called investing. The key to success is to learn how to not be the sucker.
It's like playing poker. If you look around the table and cannot figure out who the sucker is, you are the sucker. Investing is exactly the same. I use the BMW Method to see where the suckers are located. It spots them everytime. Today is a prime example.
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