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Prospect Capital Corporation Message Board

  • jadelover888888888 jadelover888888888 Jul 14, 2013 12:12 AM Flag

    Irrational exuberance

    "Definition: Irrational exuberance is when investors are so confident that the price of an asset will increase they lose sight of its underlying value. They get into a bidding war, driving prices up even further"

    "It was a phrase first coined by former Federal Reserve Chairman Alan Greenspan in 1996 to describe the investor psychology that drives an asset bubble. In his speech to the American Enterprise Institute in 1996, Greenspan described what stock investors feel at the top of a bull market. This irrational exuberance causes them to overlook deteriorating economic fundamentals in the pursuit of ever-higher returns.

    The danger of irrational exuberance is that it doesn't last. The frenzy of greed then turns to the panic of fear, which drives investors to sell at any cost. This collapse in prices can spread to other asset classes and ultimately the entire economy."

    Irrational exuberance + record margin debt + FED's uncertainty + China slowing down + Europe + tanking in EM =
    IMMINENT stock/bond/precious metal/housing market correction/crash

    First housing, then precious metal, then bond, then stock, or in whatever order........

    Just when and how BAD. It is really that SIMPLE.

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