> Brian wrote: > Then please clear up for a novice why the markets, whether they be short > term or long, would rise on a Bush win? (honest question) >
The markets are based on what people think will happen in the next 4 - 6 months. This is why they hate uncertainty. When people are uncertain about what will happen they're less willing to risk money. That is, the perceived risk is higher with an unknown rather than a known. Since it is reasonable to assume that there'll be no big changes if Mr. Bush is elected, the markets wanted Mr. Bush. > If its so painfully clear that Bush is heading the country for a fiscal > disaster, why wouldn't the markets reflect that, as the fiscal intelligentia > act on their fears? > Think of Enron and the tech bubble - did you see markets rise or fall when many long termers were predicting a bubble burst? They rose! Yahoo was $400/share. As more "dumb-money" investors flood in, "smart-money" investors jump in so that they can take the dumb money and jump out. Smart money feels they know when to get out and how to take profits before things crash. Buy low, sell high. You can only sell high when dumb or slow money make it high. Remember, the market is about making money, period. Not protecting the economy. If I can take a million dollars from all of the CF programmers before a crash, why do I care if there's a crash? It just makes me richer. In fact, if I think there's a bubble I'm stupid not to be in! Further, it depends on what your definition of fiscal disaster is. I think it will mean a very tough life for the average American, but most Wall Streeters aren't average - they're in the top 1% of earners. After the bubble you saw a lot of Wall Streeters like Frank Quattrone counting their money while your average suburban lawn mower pusher was worrying about his 401k that just dropped 60%. Let's define "disaster": if you think the economy of the 70s was no big deal and you have the means to glide through 15-20% interest rates then there's no disaster. Plus, equity will be cheap, cheap, cheap! You'll make high dough in a crash! If, on the other hand, you are someone that went shopping at 5:30am last Friday and have $20,000 in credit card debt and/or would be in deep trouble if you lost your job for a year then you may be heading for disaster. If you're counting on social security, medicare, or medicaid you may be heading for disaster. The 30s and the 70s were disasters for some, high dough for others. > So I'd ask you this, can we be sure that Buffett and Bogle supported Kerry > because of the economy??? > In the case of both of them, yes, because they've gone to great lengths to say so. Mr. Bogle is practically Mr. Nader and Mr. Buffet is a long term economic critic of Mr. Bush. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Special thanks to the CF Community Suite Gold Sponsor - CFHosting.net http://www.cfhosting.net Message: http://www.houseoffusion.com/lists.cfm/link=i:5:138568 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
