tag:blogger.com,1999:blog-7366878066073177705.post6831745021044132854..comments2024-02-09T18:16:45.614+00:00Comments on The Psy-Fi Blog: Sexual Tradingtimarrhttp://www.blogger.com/profile/06254802085744425067noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7366878066073177705.post-15659285159126650972010-09-23T16:13:56.870+01:002010-09-23T16:13:56.870+01:00Simply brilliant!
I discovered your blog a couple...Simply brilliant!<br /><br />I discovered your blog a couple of weeks ago. I picked some past posts and with almost every one of them my excitement grew until I came across this post. Now I am ecstatic!<br /><br />Great work! I simply love it.Игры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-64180739830822496082009-09-22T06:40:25.107+01:002009-09-22T06:40:25.107+01:00Hi Alan
I don't think it's necessarily th...Hi Alan<br /><br />I don't think it's necessarily that the trades are internet mediated that's the problem - although instant access to share dealing facilities is likely to be a contributing factor. For housing more likely it's standard social networks probably with a bit of a boost from the media. <br /><br />Property booms tend to be a cultural thing as well, though: countries with an Anglo background are more focused on property than many others. I suspect that this is a historical issue with its roots going back to the Magna Carta: a man's home is his castle and all that. <br /><br />Which, as it happens, is the subject of a future post I'm currently researching ...timarrhttps://www.blogger.com/profile/06254802085744425067noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-80632066796018634632009-09-22T02:51:01.160+01:002009-09-22T02:51:01.160+01:00I'm trying to figure out where the promiscuous...I'm trying to figure out where the promiscuous nodes might be during a housing bubble?<br /><br />Newspapers? TV? Real Estate Agents? I don't think it's blogs, or anything on the Internet, because these trades do not happen on the Internet.Alanhttps://www.blogger.com/profile/00449919969036824198noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-88175205093388139822009-09-21T20:45:05.225+01:002009-09-21T20:45:05.225+01:00Is it really the case that 1999 saw overvaluation ...<i>Is it really the case that 1999 saw overvaluation greater than 1929 (I don't know, I'm just curious)? </i><br /><br />The valuation metric I use is P/E10. This is the price of a broad index over the average of the last 10 years of earnings. P/E10 was recommended by Benjamin Graham and is now used by Robert Shiller and many others.<br /><br />The fair-value P/E10 number is 14 or 15. Things get a bit dangerous above 20. Insanely dangerous markets are those that go above 25. The average loss on the four occasions when we went above 25 is 68 percent.<br /><br />The highest we ever went before the invention of the internet was the 33 we reached in the month before the 1929 crash (that led to the Great Depression).<br /><br />In January 2000, we went to 44.<br /><br />We were above 25 for the entire time-period from 1996 through 2008 (except for about two months when we dropped to 23).<br /><br />We are today sailing in totally uncharted waters.<br /><br />RobRob Bennetthttp://arichlife.passionsaving.comnoreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-67268324697601448932009-09-21T19:51:40.291+01:002009-09-21T19:51:40.291+01:00Hi Rob
Thank you, you're very kind.
On netwo...Hi Rob<br /><br />Thank you, you're very kind.<br /><br />On network effects I'm not sure, really. We had plenty of bubbles and crashes before the internet. Is it really the case that 1999 saw overvaluation greater than 1929 (I don't know, I'm just curious)? <br /><br />However one might expect greater volatility if virus like information is more easily distributed. That's something I'll look into when I get some time.timarrhttps://www.blogger.com/profile/06254802085744425067noreply@blogger.comtag:blogger.com,1999:blog-7366878066073177705.post-67818920433486172242009-09-21T16:18:37.404+01:002009-09-21T16:18:37.404+01:00This is the best written money blog I know of. Qua...This is the best written money blog I know of. Quality is high here and none of the articles I have read just parrot conventional wisdom (the most common failing in this field).<br /><br />We reached valuation levels never seen before in the late 1990s (which means that we are likely going to see the biggest economic crisis in U.S. history before this is over). I have wondered to what extent the problem is the internet communications medium. The wonder of the internet is that it so greatly facilitates the spread of information. But what happens when the "information" spread is mostly rationalizations for investing in insanely overpriced stocks? In that circumstance a medium that facilitates "information" sharing is a National Suicide Pill.<br /><br />RobRob Bennetthttp://arichlife.passionsaving.comnoreply@blogger.com