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"dumbstruck" <d...@g...com> wrote in message
news:f600e7de-77f9-4617-b73e-e8e3cb46c254@r36g2000pr
f.googlegroups.com...
> If I had depended on SP500
> indexing I would be not only poorer but would have mentally numbed my
> interest in finance.
>
And some of us are quite happily retired for having done so in large part.
Elizabeth Richardson
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raylopez99 <r...@y...com> wrote:
>On Oct 21, 11:10 am, Douglas Johnson <p...@c...com> wrote:
>
>> The classic book on bubbles is Extraordinary Popular Delusions and the Madness
>> of Crowds by Charles MacKay. It discusses bubbles all the way back to the tulip
>> craze. Read it and bubbles become real easy to recognize.
>>
>> http://www.amazon.com/Extraordinary-Popular-Delusion
s-Madness-Crowds/...
>
>
>I beg to differ. It's difficult to recognize bubbles in progress.
>For example, many of us saw there was a real estate bubble (if you
>lived on either coast, this was clear) but how many saw that this
>bubble would pop and implode fixed-income investments?
Let's not mix up recognizing the bubble and predicting the consequences.
Around here, we talked about the housing "bubble in progress" as early as 2005.
The earliest (that I can find) we talked about fixed-income investments
cratering was June of 2007.
I say again. Bubbles are easy to recognize. I'll agree with you that the fall
out is difficult to predict.
-- Doug
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Douglas Johnson <p...@c...com> writes:
> The classic book on bubbles is Extraordinary Popular Delusions and the Madness
> of Crowds by Charles MacKay. It discusses bubbles all the way back to the tulip
> craze. Read it and bubbles become real easy to recognize.
>
> http://www.amazon.com/Extraordinary-Popular-Delusion
s-Madness-Crowds/dp/1890151408
A more modern, and more financially-oriented book is _Devil Take the Hindmost_
by Edward Chancellor. A great read and it really shows that nothing ever
changes.
--
Rich Carreiro r...@r...com
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On Oct 21, 6:25 pm, Rich Carreiro <r...@r...com> wrote:
>
> A more modern, and more financially-oriented book is _Devil Take the Hindmost_
> by Edward Chancellor. A great read and it really shows that nothing ever
> changes.
>
Another revisionist account of the "Great South Seas" bubble
http://en.wikipedia.org/wiki/South_Sea_Bubble as well as the
coincident scheme by John Lay (http://en.wikipedia.org/wiki/
Mississippi_Scheme), is that essentially this was an early attempt at
modern deficit spending.
The theory being: issuing worthless shares for money was a first
attempt to do what modern governments do everytime they sell
government bonds--monitizing the debt.
Trouble is, the South Seas promoters and John Lay in the Miss. scheme
overestimated demand. But for that mistake, it would have been a
great success.
This according to a revisionist historian (somewhat tongue in cheek,
as a criticism of modern government deficit spending, but his point is
well taken to a degree).
RL
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