lt memory loss, page-2

Brilliant post, Samizdat.

I think you and I have the same people on Ignore!

I remember in 1987, I was a grad student at uni, flat broke, only theoretically aware that the stock market existed. One of my colleagues was a mature age student though with significant investments. She came in one day in October, white as a sheet, and was depressed for weeks afterwards.

I remember laughing at her talk about "the end of the world" and all that. Looking around me, most people were just continuing on doing the same old routine, it really didn't matter at all for most people.

This time around, similar story. To be honest, I do not understand at all why some dodgy mortgages in the US now seem to have toppled the entire world economy into an abyss. Looking around me, people are still going to work, still buying their plasma TVs, nothing much has changed.

We know that the market will come back. We know that that market is WRONG in it's pricing of stocks far more often than it is right. We also know that the big players (super funds etc) determine price. There's nothing we small players can do about that.

So the only sensible approach when the market has a tantrum like this, is to invest fully when you think the market has bottomed, into a diversified portfolio of oversold stocks, and then ignore the entire market for months at a time.

Let people rant and rave. It never makes any difference.