Jun 26
Reflections on the stock market
What I want to know is what so many people consider rampant criminal behaviour capitalism run amok? There are a number of things wrong (negligent boards, corrupt auditors, dishonest analysts, etc.) but that's hardly evidence that the concept itself is a failure - corruption is anathema to capitalism.
This wasn't some great conspiracy to defraud Joe Public, either. The fact is simply that most people got caught up in a get-rich-quick frenzy and dismissed anyone who disagreed. The people who said that insolvent.com would fail were lambasted while everyone went out and bought DOW 36,000 instead. Yes, there were opportunists who took advantage of it but there are always crooks and any adult should know not to unquestioningly accept advice from salesmen.
The truth was out there for anyone who cared to look - Enron was predicted well in advance by the few non-cheerleader analysts, most of the dot-coms were clearly doomed even before they IPOed and as far as Worldcom goes, it's not like people who were actually paying attention to the industry haven't been waiting for them to crash (and they made no small amount of money predicting the stampedes).
Nobody chose to look - most of them were busy pretending that the Greater Fool theory was a viable long-term strategy.
Irresponsible people repeatedly doing stupid things produces bad results - in case anyone was unclear about that, it's been proven again. Where does the condemnation of free-market capitalism come from? There aren't that many people who still think socialiam is viable - is it just that it allows people to avoid admitting that they should have been more careful with their money than a drunken marine on leave?
This wasn't some great conspiracy to defraud Joe Public, either. The fact is simply that most people got caught up in a get-rich-quick frenzy and dismissed anyone who disagreed. The people who said that insolvent.com would fail were lambasted while everyone went out and bought DOW 36,000 instead. Yes, there were opportunists who took advantage of it but there are always crooks and any adult should know not to unquestioningly accept advice from salesmen.
The truth was out there for anyone who cared to look - Enron was predicted well in advance by the few non-cheerleader analysts, most of the dot-coms were clearly doomed even before they IPOed and as far as Worldcom goes, it's not like people who were actually paying attention to the industry haven't been waiting for them to crash (and they made no small amount of money predicting the stampedes).
Nobody chose to look - most of them were busy pretending that the Greater Fool theory was a viable long-term strategy.
Irresponsible people repeatedly doing stupid things produces bad results - in case anyone was unclear about that, it's been proven again. Where does the condemnation of free-market capitalism come from? There aren't that many people who still think socialiam is viable - is it just that it allows people to avoid admitting that they should have been more careful with their money than a drunken marine on leave?
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