There is a widespread argument out there that retail investors are not fully participating and that could signal more gains as they jump on board. This is not a bad analysis, but it does not take into account post-crash historical facts. It took retail investor more than 20 years to get fully "interested" in the markets after the crash of 1929. After 1987, eight years, ten if you skip the first two. The losses incurred by many in 2000 far exceed 1987, so we might have to wait a little longer for full on retail investor participation. Furthermore, to go back and compare the current environment to the bull market of the 90s is utterly absurd. The mid to late 90's showed strong growth coupled with low inflation. We currently have slower growth, slower earnings and stubborn core at 2 or above. M&A's from cheap money is not something to hang your hat on for too much longer, but we will give bulls the benefit of the doubt until proven otherwise. Just stand near the exit doors as it could get crowded when someone yells fire.
This entry was posted
on Monday, July 23, 2007 at 7/23/2007 12:32:00 PM.
You can skip to the end and leave a response.
» Post a Comment