Mar

4

There are two theories on stock valuations: 1. That the market accurately discounts the correct absolute value; 2. That the market is irrationally exuberant or depressed and overshoots the correct values. Under theory 2 the values are relative. If theory 1 is correct, it will be hard to achieve former all time highs soon as fundamentals still lag former glory. If theory 1 is correct, prior values may have been exuberant, but compared to recent lows achievable if every one piles in, especially the last few hundred points. We seem to be still in a market that won't go down. My take is theory 2 as money in general is nothing more than confidence or lack thereof.


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