Post of the Day
September 1, 1998

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Subject: What's the Problem?
Author: Cyrus7

Greetings fellow Fools,

Having watched CNBC, listening to others over the internet, and overhearing conversations at lunch, I'm quite puzzled that a greater part of the American public does not read into much more than the big bold headlines of the papers written to catch any wandering eye. Very well then, here is my headline for the day:

WHY IS EVERYONE PANICKING?!

Since before the Great Depression, the stock market has seemingly hit rock bottom various times, but it has always chugged back to new highs afterwards. This is only another dip on the graph, yet the first reaction of many people is to sell, sell, cry, sell, run, sell, hide, and sell after every huge correction. What I have learned over my short investing career is that the stock market follows the laws of Sir Isaac Newton and momentum: objects in motion tend to stay in motion. Unless an asteroid the size of LA hits the earth at 146,000 miles per hour today, I don't think there are many circumstances that can stop this great, thriving American economy of ours. With the internet boom, pc craze, and semiconductor explosion, why the panic to sell?

As an inhabitant of Fooldom, I know that if anything, our mouths should salivate when the market tanks, not go dry. As for my co-workers who at the moment are ridiculing me because I have stakes in Dell, Cisco, Microsoft, and AOL, I can only say one thing to these 'Wise' short-term traders who sold their long positions today: although it's very unlikely, but possible, what would they do if the market made up everything it lost tomorrow, or even the next few days? I would probably guess that they would cry, run, and hide once again. Instead of stressing out over this emotional roller coaster they keep standing in long lines for, my advice to them would be to meet two guys named Tom and Dave and begin to learn how to really play this game we call the stock market.

Fool on, friends!


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