Re: Dow 36,000

Peter C. McCluskey (
Sat, 30 Oct 1999 10:49:52 -0700 (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 until they stop suing | companies that support 1-click shopping.