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Nina: Markets are a means of discounting psychology. What that means is that despite all the wonderful economics and quantitative work, people buy markets because they believe they are going to go up. How they determine or justify their desire to buy is a whole different story. Likewise, they sell when they are afraid prices are going to go down. It's a matter of greed and fear. If you look at the psychological cycle in a move, the mood is always most negative at bottoms when those holding long positions can't stand the pain any longer. At tops, people are convinced that the rise will go on forever in a ''new era." Smart money, or the really astute investors, are those able to withstand the conventional psychological pull and be there to buy when the crowd is liquidating and to sell to greedy longs who can't get enough. Even the most rational individuals seem to be overwhelmed by crowd psychology when it comes to markets. |
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Neal: Are we coming up to a new millennium; are we going to have what Herbert Hoover said, a "permanent prosperity"? |
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Nina: I think we're already there. I have to tell you, I do see a new millennium, but I don't think it's the euphoric millennium people talk about and would like to think it will be. I said you can use Elliott at a wide range of time horizons. That means that you can look back over a very long period of time, hundreds of years in fact, perhaps even farther back. And likewise, you can look far into the future. |
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Neal: Why is the millennium going to be different? |
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Nina: My view is that the millennium is going to be different in a way that people are not anticipating because the very long-term cycles are peaking. |
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