From: Peter C. McCluskey (pcm@rahul.net)
Date: Sat Oct 30 1999 - 11:49:52 MDT
lcrocker@mercury.colossus.net (none) ("Lee Daniel Crocker") writes:
>> I am now completely out of US stocks, though
>> I do have a huge stake in DC area real estate.
>
>How can anyone who has read Julian Simon be comfortable
>investing in "natural resources" whose value must
>eventually decline, and not invest in the creativity and
>ingenuity of boundless human accomplishment? I realize
>that short-term prospects may be different, and that a
>human lifetime is currently short-term, but I'm still a
>lot more comfortable with my money in the hands of hard-
>working widget makers than in dirt.
Moore's law. Simon is extrapolating from a period in which the effort
required to produce more human ingenuity has remained constant while
the effort needed for most other things has dropped. The effort needed
to produce human-equivalent ingenuity will probably adopt a radically
different trend in a few decades.
For the shorter term, I think at least half of the reason that stocks
have deviated from Shiller's model is the baby-boomer demographic effect,
and that it may take a bit more than 10 years for Shiller to be proven
right. I'm nervously buying stocks now. Most of the overvaluation Shiller
sees is in the S&P 500. I see some good values in places like small-cap
semiconductor equipment stocks.
-- ------------------------------------------------------------------------ Peter McCluskey | Boycott Amazon.com until they stop suing http://www.rahul.net/pcm | companies that support 1-click shopping.
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