Jolly_Rancher

Jeremy Grantham: Stocks Still Aren't Cheap

notsosmart, I think you have nailed it. You speak the real truth. The real reason stocks are falling so dramatically has nothing to do with deleveraging or economic distress. The real reason is that no one trusts the insiders who have been milking companies dry with huge salaries and massive corrupt stock option plans. At the same time they play games with earnings and balance sheet. Witness Lehman's huge award of 100 million dollar bonus just before declaring bankruptcy. The atmosphere between shareholders and management is downright hostile. For years, my refusal to buy any share in which there has been insider selling, especially the repeated cashing in of huge stock options, has saved me from experiencing the pain that other investors have experienced. And even though stocks appear "cheap" or "fairly valued", this doesn't changed my opinion or my actions. I refuse to play games with these people. I am 100% invested in companies with real products whose management is doing the job right for a fair salary. I'm at about break even for the year. Furthermore, people who blindly buy index funds like the SPY are grossly contributing to the problem.