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Loren Cobb has a good email, but there are several points I take issue with.

Point 3) Trailing earnings are irrelevant to rational price action, in general, as that is known info.

5) Jim Cramer is a hedge fund manager, not a market maker.

6) Trailing Standard deviations of the Nasdaq are also, alas, known info and therefore useless when making a timing decision on the market.

7) I see no correlation between the increase in margin debt, which has been entirely rational so far(ie you've made money), and ' strong evidence of a speculative bubble.' Please define -strong, evidence, and speculative bubble.

9) I don't understand why purchasing puts is 'incurring a limited risk of loss.' Clearly buying a wasting asset like an option sharply increases your odds of losing 100% of your investment. Again, what is the reason for a drop to happen NOW?

Your recs-
1) sounds good.
2) I agree with the mortgage comment, not the credit card. If people are comfortably borrowing at 3.9% or lower to buy a financial asset instead of a new car or suit or trip to the Bahamas, why shouldn't they? At least they will get some level of return.

3) Again, why? A rational investor will own fixed income and equities, and should be able to 'issue' debt as well to have a portfolio that fits his or her needs. Why is margin now 'evil' vs. last year or 1980?
Plus, you get a partial tax writeoff. (Same goes for the mortgage as well.)

I think you are forgetting that money is a fungible commodity and it doesn't matter which pocket the dollar comes out have to buy something, whether it be stock or shoes or coffee or housing. We all have one 'box' of assets or revenues(i.e. your money) and one set of expenses. You are arguing about how to rearrange them which doesn't make sense. You should be more concerned with an investor's risk tolerance.

4) I completely agree.

EconDropout sounds like someone whose nerves are a little bit jangly in the new year. Thinking you can time an entire market is Wise. Just look at the Wisest around, and judge if they have been successful.

All in all, a very good post. Good luck and happy trading to all.

EMS
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