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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread
VTI 336.57-0.3%Dec 8 4:00 PM EST

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To: Justa Werkenstiff who wrote (1245)6/13/2001 8:01:01 PM
From: Math Junkie  Read Replies (1) of 10065
 
Re: "I can imagine many exogenous events. But what is the point? Who knows if they will come to fruition."

Some people think that every time an exogenous event moves the market, that proves that you can't predict what the market will do, not even in broad terms. My attitude is that looking at things like economic growth, monetary policy, valuation, and sentiment can at least give an indication of when the market is especially vulnerable. Although it is probably true that you cannot predict exogenous events, in the words of the late, great Roseanne Rosannadanna, "It's always something." Furthermore, in some cases there may be more of a causal connection than people imagine. Take the runup in energy prices, for example. The causal connection to that from rapid economic growth seems all too obvious. The OPEC nations were not able to get higher prices before economic growth accelerated because demand had simply not heated up enough to support it.
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