Is There a Market? Ho Ho Ho!
Alan Greenspan takes pleasure in answering the communication below, expressing at the same time his great gratification that its faithful author is numbered among the friends of the Fed:
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Dear Mr. Greenspan:
I am 78 years old. Some of my friends say there is no stock market.
My daughter says, “If you hear it from the Fed, it’s so.” Please tell me the truth, is there a stock market?
Virginia O’Hanlon Jr.
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Virginia, your friends are wrong. They have been affected by the skepticism of a skeptical age. They do not believe except they realize in net taxable gains. They think that nothing can be which is not cash or actual dividends. All minds, Virginia, whether they be bears’ or bulls’, are little. In this great universe of ours, regulators and politicians are mere insects in their intellects as compared with the boundless world about them, as measured by the weighted average that is the Standard & Poor’s 500.
Yes, Virginia, there is a stock market. It exists as certainly as options, futures and preferred dividends exist, and you know that they abound and give to your portfolio its highest growth and return.
Alas! How dreary would be the world if there were no stock market! It would be as dreary as if there were no Virginias. There would be no brokers, no analysts, no auditors to make tolerable this existence. We should have no irrational buying or panic selling. The infectious greed with which investors fill the world would be extinguished.
Not believe in the stock market! You might as well not believe in strip bonds or convertible debentures. You might get your daughter to hire men to watch on all the trading floors in all the exchanges throughout the world to catch Russell or Dow Jones or Standard & Poor’s, but even if you did not see them, what would that prove? Nobody sees paper profit, but that is no sign that there is no stock market.
The most real things in the world are those that neither children nor men can see. Did you ever see capital gains or unexercised stock options? Of course not, but that’s no proof that they are not there. Nobody can conceive or imagine all the financial wonders there are unseen and unrealized in the world.
You tear apart the cell phone and see what makes the noise inside, but there is a veil covering the financial world which not the strongest regulator, nor even the united strength of all the strongest regulators that ever lived, could tear apart. Only faith, greed and irrational exuberance can push aside that curtain and view and picture the fiscal beauty and glory beyond.
Is it all real? Ah, Virginia, in all this world there is nothing else real and abiding.
No stock market! Thank God! It lives and lives forever. A thousand points from now, Virginia, nay 10 times 10,000 points from now, it will continue to make glad the heart of investors.
