We can't forget that the mentality which pushed th...

2009-06-12T10:39:03.662-04:00

We can't forget that the mentality which pushed the dow to 14m+ is still pervasive in the average retail investors mind. If you take out the people who are affected by the reality of the downturn, you still have millions of idiots that think the Gov. will pull this bailout off. So they continue to buy at the direction of "salemen" pretending to be financial advisors, who are just living of the fees with no real clue, and viola, the market continue to rise.
But there's one more thing happening, and that's "what falls will also rise". I.e. because we have had a big fall, which then rose back in a short period of time, retail investors feel that even if it goes down again, it will rise again, so they are essentially running no risk in buying back in. They feel they will not sell into the next downturn. That's avery dangerous thought process, which is what really happened between 1929-1932, and it will more than likely happen again. That being said, one has to seriosly consider the day trading potential of this mentality. Kind of makes me want to go long, but I think I will still wait in out with 85% cash.
SMTF

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We can't forget that the mentality which pushed th...