Wednesday, May 30, 2007

Irrational Exuberance

Interesting Fact Of the Day (or middle of the night as the case may be): Everyone remembers that Alan Greenspan warned that the tech bubble of the 90's was an example of "irrational exuberance", and he predicted that the bubble would burst. Now, looking back, everyone wishes that they would have sold then and avoided the collapse, right?

Wrong. The stock market had a small dip immediately after Greenspan issued his warning, but since then, stock prices have never gone lower. Let me say that again: the stock market has never been lower at any time since that warning. If you bought then, you would now be up 139%.

Source: Don Luskin


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