Re: Sustainable Stock Prices

[Mason Clark <masonc@xxxxxxxxxxxxx>]

>  However, survey and other evidence suggests that people do not in fact
>vary their subjective discount factors all that much and certainly
>not enough to justify such price volatility.  Clearly they are varying
>their expectations of future dividends or capital gains.

  Regardless of what people say in response to a survey--when
  they are defending their intelligence--they are betting on *what other
  people will pay* for the stock.  "Fundamentals" such as dividends and
  capital gains be damned.  Warren Buffet has not participated in the
  Internet balloon.  Economists: don't insist on imposing *your* concept of
  rationality where it doesn't apply.

            Mason