Booms, Busts, and Recoveries Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: tradermike_1999 who wrote (255)	10/26/2000 3:09:29 PM
From: quasar_1	Read Replies (2) of 74559

Real Estate... Metrics have never meant anything at the margin (the last clearing price). I brought up the point about these under performing stocks to address the 'overvalued' view that many frequently bandy about. (By the way the three companies I mentioned are all technology companies-very much new economy.) Not only the advance/decline line but the number of stocks beneath their 200 day MA's (a simplistic measure of LT trend) has lived below 50% for a long time now. It has its occasional crossover above 50% but this is short lived. What does all of this blather mean. For the most part we've been in a stealth bear market for a long time, possibly since 1998. Most stocks have been falling since then. Many are fundamentally undervalued. A few are priced for perfection and have dominated the composition of the averages. Don't believe what you hear at face value. The media, analysts, message boards are filled with far more myth and dis-information than truth. The truth is always pretty simple to discover. You only have to look for yourself instead of accepting somebody's repackaging efforts. Be very wary of simple cause and effect relationships. Higher earnings 6 months out mean higher stock prices...prices only fall in a rising rate environment and visa versa...short term price reflects fundamentals...x or y are inflationary/deflationary—all the many "x means y" myths that often have no basis in fact. It is primarily psychology that dominates marginal price decisions. This is a herd, pure and simple. How do you know this? When you see your biotech stock going down because Nortel missed it's earnings estimate, you have a pretty good idea this is a market effect (psychological) not a company specific or group specific fundamental event. On just about every day of the recent downturn almost every stock I own (across many groups) goes down or up on the same day within minutes of each other. Can the Naz go below 2000/1000? Of course it can. Can it go next year? It could go next month. It could also go up dramatically or go violently sideways. (The market action since March). What does any of this price movement have to do with reality? Painfully little... Q

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next