3 ms·
The same is more or less true of bonds though, no? Bond value is determined by perceived credit risk and people's feelings about the future direction of interes
by darawk 9y ago
The same is more or less true of bonds though, no? Bond value is determined by perceived credit risk and people's feelings about the future direction of interest rates in general. Of course, eventually if you're correct you do indeed get paid by the borrower with a bond. However, the stock market will eventually fall in line with realized earnings. The only real difference is that the bond market's time horizon is fixed, whereas the stock market can stay irrational for a finite, but arbitrary amount of time.
- lambda 9y agoOr as they say, the market can remain irrational longer than you can remain solvent.
- danmaz74 9y agoMore specifically, as John Maynard Keynes said
- lambda 9y agoNot according to http://quoteinvestigator.com/2011/08/09/remain-solvent/ http://quoteinvestigator.com/2011/08/09/remain-solvent/. Apparently what Keynes said was something similar, but not that same phrasing: There is nothing so disastrous as a rational investment policy in an irrational world.
- ucaetano 9y agoAnd in the long run we are all dead anyway.