When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
- Chuck Prince, CEO of Citigroup. July 2007.
Qs 1: An often asked question of many people is that the markets are going up while economy is in shambles. How is that possible?
Answer: Simple. When there are more buyers than sellers, prices go up. Vice versa too.
Qs 2: How high can the markets go?
Answer: By logic, as long as the FED backstops the market, there would be confidence to buy. As long as more retailers continue to join the market. It would go up.
Qs 3: But doesn’t fundamentals matter?
Answer: Benjamin Graham once said the stock market acts like a voting machine in the short run, but it is very much a weighing scale in the long run - eventually the two would...