It’s obvious that slippery Enron-style accounting methods are to blame for the stock market’s woes these last six months. And when you’re playing the market, you know that anything obvious is probably wrong.
Robert Samuelson explains:
But it’s not true that all this bad behavior caused the market bubble. Nor is it true that greed was confined to the top. On Aug. 12, 1982, the Dow Jones Average was 776.82. By the mid-1990s, when it passed 5,000, a rising market began to look like a sure thing. Everyone could get rich quick. Americans poured $1.1 trillion into stock mutual funds from 1996 to 2000. Greed went democratic. A speculative culture produced speculative behavior across the social spectrum. The market rose on a tidal wave of money and a mindless enthusiasm for Internet technology, which was glorified by much of the media.
Me, I’m an old-fashioned guy. I always thought that stock prices were supposed to reflect profits. That whole P/E ratio thingywhitchit. So, yeah, I missed the big dotcom run up that ended a couple of years ago.
But I also missed taking all those losses the since March, 2000.