NEW YORK ( TheStreet) -- You make money in the market by going against its emotional tendencies.
We all understand irrational exuberance. Online grocery stores and liar loans were obvious signs of a crash coming in the late 1990s and mid-2000s.
But there is also irrational pessimism. The markets of 2001 and 2009 were great times for long-term investors.
This behavior can also infect individual stocks. Right now I'd say Amazon (AMZN) is going through an irrationally exuberant period. Great company, great growth story, but this is a retailer selling for two times its annual revenue, for which profit is anathema. As Paul Volcker once said to a woman asking for stock tips, "Prices will fluctuate."Then there is the irrational pessimism currently surrounding Apple (AAPL). It's gotten so bad people aren't even talking about it anymore. A trailing earnings multiple of 11.71, minus its cash hoard,
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