All Clowns Must Be Destroyed Message Board

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Pastimes : All Clowns Must Be Destroyed

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To: Ilaine who wrote (38950)	6/11/2000 6:20:00 PM
From: Mark Adams	Read Replies (1) of 42523

I understand that indexing distorts the market, yet the extreme amount of attention paid to the DOW and Nasdaq index numbers directly impacts consensus opinion. Knowing this dichotomy exists should prove profitable somehow. In this environment, not only do we have to be wary of inflated valuations in individual issues, resulting from blind indexing taken to extreme, but also be aware that ignored value stocks will likely take it on the chin if mass psychology shifts result from the index dropping. In the past, stealth bear and bull markets in various sectors provided opportunities as the averages continued their march to new heights. Picking value stocks in sectors experiencing a stealth bear proved profitable when rotation into that sector occurred. Mass psychology (and general market risk) were small risks that could be offset by managing diversification. I assume that sectors will continue to experience stealth moves masked by the published indexes. But how will this translate if the widely followed indexes are flat to down? The Fear of a shift in Mass Psychology keeps how many of us on the sidelines?

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