Don't Blame Greenspan
3/06/2001
Raw Commentary by,
The Reporter (AKA: Joemoney) @ www.marketreporter.com
Alan Greenspan is refusing to become the stockmarket hero when we need him most, but are we really to blame him? Is it just whenever we screw up by creating the largest stock market bubble in history we should have some government big wig come and save us? I don't think so. Actually the stockmarket needs a recession like to put the challenge back in investing. You know, people complain a lot about how hard it is to make money in this market but being that the memory of these short term trading stock fanatics only last for about 3 years, that only makes it more difficult to create a stockmarket where people know what there doing. Four years ago, you could type in 10 random stock tickers and buy them all and usually come out ahead 3 years later. But now, like the old days, you have to do something that seems unheard of lately in the investing community and it's called RESEARCH. Yeah, go look it up.
re·search (r-sûrch, rsûrch)
1. Scholarly or scientific investigation or inquiry.
2. Close, careful study.
HUh? Investigation? Careful Study?
"Uh, but my work buddy gave me a hot tip!?!" you say.
"Ok dufus, forget your work buddy. He is caught up in all the commotion of the latest trends that will eventually FAIL (example: dot-coms)." I say.
**Enter Sarcasm** "Here's an idea! Buy a large cap stock!!!" I say.
"You mean a stock that can't be daytraded?" you say.
"Yes, remember those stocks? They have patents older than most of those deadbeat companies in your portfolio." I say.
Yes folks, your hearing me right. Many of the most stable companies in the world right now are great buys in such a horrible market. Ok!... The first stock that comes to your head is Microsoft, right? Well your not thinking logically. Sit down tech-boy, let me drop my opinion on Microsoft.
Microsoft, the software giant headed by supernerd Bill Gates. It's recent troubles have lead it into a corner surrounded by paint. The government wants to break them up into 3 companies because of their monopolistic like actions taken in the economy. Now, do you feel that a company being investigated for having a monopoly is worth buying? That's the same as buying some flanky (new word, sorry, LOL) dot-com stock and hoping they make a profit next quarter (fat chance).
Microsoft is earning about 1.79 per share and is not going to go broke anytime soon (with over 26b in cash). Now tell me, how can such a dominating company fall like it has been falling in the past year? By the anti-trust suits being placed against them. Use this as an example; if Phillip Morris added a new line of cigarettes to it's already deadly line of products with actual marijuana in it, would you invest in them? Even if there new drug sold better than any other product in the nation? I certainly would not buy their stock. Because, what they are doing is illegal! You don't go throw you money in an illegal company and expect the company not to get caught. And the fools who bought Microsoft a year ago when it was at 120 per share, are having their ignorance reflect their stock portfolio value. And that's the way it should be, the dumb people should just be able to make money by throwing cash into some dot come and having it rise. Everyone should research, and not be dumb. Now! Back to Greenspan...
Alan Greenspan does nothing but his job. He doesn't give out financial advice or time the market. Alan Greenspan is merely here to play with interest rates and head our economy, and not our stock market. It was US who screwed up in making this bubble burst. In the past few years America has been so caught up in such a stock frenzy filled with wild rides on Wall Street that is has lost focus on what investing really is. It's INVESTING, it's not a gambling ring, it's not a get rich quick scheme, it's just old fashioned INVESTING.
Alan Greenspan is no more responsible for being concerned with the eradication of $2.2 trillion in market value in technology stocks than he is responsible for putting that illusory value on the balance sheets of deluded investors in the first place. In many cases, it's safe to argue that, in reality, that value never existed.
Remember when Greenspan warned of "irrational exuberance" when the Dow Jones rose 25% in the first 11 months of 1996? Well, he warned us, but we didn't listen.
Greenspan didn't create the highs of daytrading nor did he create online trading for 8 bucks. He never encouraged CNBC is start a teenage stockpicking contest to get kids involved in investing, oh, but since those are only 3 month contests, I guess you could call it trading. And if you saw some kids on TV getting these 200% returns on their 3 month portfolios wouldn't you be intimidated to trade stocks?!? You think if kids can do it, so can you. Heck, what do some punk kids know when it comes to investing? So then your dumb behind goes out and opens an Ameritrade account and then deposits your life savings in the account and then beings to looks for some 100 dollar, no earnings, super technology stock. Then pow, one day the market comes to it's senses and falls to it's support levels and your stuck with a 4 digit portfolio and ownership in a couple of "soon to be out of business" companies.
Bottomline, don't blame Greenspan. He controls the economy, NOT THE STOCKMARKET. People just listen to him, and move the stockmarket because of their own ignorance. Those who buy and sell on the words of Greenspan deserve to be smacked up side the head with those thick goggles Greenspan wears, or their own deflated portfolio printed out on paper (because you know that only old folks have brokerage house accounts). Yeah, well we will see who comes out on top this year when all the dot coms fail but one, thus creating another monopoly situation for the government. Let's just do our research next time, ok?
by
Joemoney
