Many people will try to see what they want to see and not necessarily what is actually going on. Don't fall into that trap. Be aware of indicators that suggest things may change, but do not get into forecasting. The greatest investor of them all, Warren Buffett, has saying, "Forecasting tells you how much about the forecaster and nothing about the future!"
If the year 2008 told you anything, it should have told you that there is no such thing as an ever-growing economy. If you believed that real estate properties will continue to rise because "they're not making more Real Estate," then please read the book, Extraordinary Popular Delusions and the Madness of Crowds (Mackay, 1980), and you'll see that hype existed long before our current "economic recovery," all the previous economies before that and will continue to exist well into future economies!
Ultimately, company values will depend on their financial performance in the long term. Sure, there are wild short-term swings and great opportunities in the immediate term. Sure, there were some amazing opportunities during the early part of 2009 (bargain basement prices abound!). CAM Trading participated in those crazy days too. But, eventually when the market wakes up, guess what happens to those synthetic prices? History repeats itself time and again, especially where the stock market is concerned.
No comments:
Post a Comment