Anyone Else Want To Call For A Market Crash?
By Avi Gilburt
GoldSeek.com
Sunday, 12 November 2017
Hindenburg omens. Market valuations. Record low volatility. And, I am only scratching the surface of all the reasons paraded before investors as to why this market is, in their opinion, “too high.”
So, is this time different? Have we finally conquered the business cycle and the stock market will rally on forever?
Absolutely not.
But, when article writers suggest that their old methods of market evaluation have failed them, and then conclude that we need to prepare for a market crash, it makes me question the logical if/then perspective of their analysis.
I mean, how does one theorize and conclude that “if” your analysis method is not working, “then” you must prepare for a crash?
First, if you are using a method that consistently produces wrong results over multiple years, maybe it is time to actually question the usefulness of the method, and not conclude that it must mean we are going to crash.
Second, if one understands the nature of technical divergences, one can also come to an understanding of fundamental divergences, which will explain why most former methods of evaluating the stock market have been useless for years now.
Third, Paul Samuelson, the Nobel laureate from the Massachusetts Institute of Technology, recalled that John Maynard Keynes once was challenged for altering his position on some economic issue. “When my information changes,” he remembered that Keynes had said, “I change my mind. What do you do?”
So, as the fundamental nature of the stock market has changed, have people changed their mind? No. They simply continue to apply their old analysis methods, and, again, conclude that we are going to crash.
The Rest…HERE
