They will have no stomach for anguish and pain and they will stampede. Stock markets are driven by economic fundamentals, market barometers, money flows and emotions. As we have mentioned, the economy is suspect and market barometers are off the chart. The money flows come from too much leverage, fickle foreigners who are starting to hurt and corporations buying stocks instead of building factories. Only emotions are positive and that's not going to be enough.
Fear always replaces greed in over-speculated markets.
I was interviewed the other day by Howard Ruff and he made the point that despite the enormous deflation in the Japanese stock market and in real estate, the average Japanese doesn't seem to be suffering. In reality the Japanese did in the eighties what we are doing in the nineties and they have managed to wreck their economy. Individual Japanese have high savings rates and low debt levels. The something that would have to snap is creditworthiness. Take part of your profits now and buy gold.