I'm thinking 'tis the season to be jolly and all that... but also thinking it's no so jolly for many and most who I meet seem to be in a funk of one sort or another. Somehow the merriment is lacking at least around here. I won't bring up politics because that's useless.
Was at my usual Saturday afternoon wine tasting this past weekend; the establishment dropped the admission price by 50% for the last tasting of the year and 3 times more than the usual number of people attended. It was more crowded at the tasting than at the shopping mall. Says something about free markets don't it?
Learned years ago that pricing makes a big difference and that you can over price as well as under price things with the same results. Items in either category won't sell. People always want to pay what they feel the things are worth. I think it's the same for stocks. Priced too high people stop buying it drops too low, they get worried about the worth of the equity and they don't buy. Priced just right and they can't get enough until .. well you know how it goes. Says something for free markets don't it?
Also learned that people like to shop around and feel they've done their research that way before buying. Makes them feel better about the purchase they make. I think it will play big under current economic times. Imagine if all prices were regulated which would take the play out of the purchase. Would not be fun for merchant nor customer because consumerism would diminish, world markets would slow, shopping would become mundane and done mostly when necessary further reducing variety of merchandise and therefore choice. Economies would fall, unemployment would rise, innovation would slow. Sounds like what's happening in Venezuela, what happened in Cuba etc. etc. Says something for free markets don't it?
The horse and buggy market is not at the top of it's earnings heyday either, wonder if in today's world, would they have been entitled to a government bailout? Do you think the automobile's success would have been postponed as a result perhaps? Says something for free markets don't it?
At least 3 major airlines went into chapter 11 bankruptcy; UAL twice I believe, AMR and DL yet they are all still flying and competing. (I will comment about their customer service some other time because that certainly needs a bailout.) Knowing what they have been going through for the past 30 years, since deregulation, it's a wonder so many have survived. Actually it was predicted that only 3 would survive: TWA, Pan Am and UAL. Says something for free markets don't it?
So my final thought is: Stop clamoring for government intervention, regulation to save your a$$ets and then maybe sooner than you think, markets will right themselves again, companies will do what's necessary to survive, the ones that can't or won't will and should be out of business. And that's exactly how free markets work.