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Money managers look at the way Alliance Capital is being pilloried -- for having bought Enron stock on the way down -- and realize that buying a questioned stock entails big risks.
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So says a prominent market psychiatrist who thinks the market's peaks and dips mirror the emotional swings of investors who are beginning to seriously question stock prices after the longest bull market in history.
The former Dick Smith company secretary and head of investor relations, David Cooke, was questioned about stock levels and new store openings before the company's collapse in January this year.
Questioned about stock purchased by senior officers, Mr. Lay commented that he was among those buying shares.
"There is no question, stocks have risks".
The Chartist: "There is no question stocks have moved lower after bumping up against short-term resistance levels.
"There's no question stocks are undervalued today," says Mehra, 59. "But they still could go down another 50%." The chart below shows changes in one of Mehra's favorite measures of market value: the ratio of the value of all publicly traded U.S. stocks to GDP.
He has been known to do favors for Mafia-related individuals, and has also been questioned about insider stock trading.
He did not hide his anger when reporters and short sellers of the stock questioned Tyco's accounting or business strategy.
Stephen J. Carl, head equity trader for the Williams Capital Group, said the disappointing economic figures were causing investors to question whether stocks were out of touch with the actual pace of economic renewal.
Instead of pouring into the stock, as they did a decade earlier with Google, many investors questioned whether Facebook's stock was overpriced at $38 a share.
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