Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: lifeisgood who wrote (71496)	5/25/2002 2:50:54 PM
From: LTK007	Read Replies (2) of 99280

___Fear, good bottoms capitualtion etc are merely functions of a declining economy and declining or stagnant corporate peformance.____ <<<You should ask for your money back from whoever gave you that bad advice. Fundamentals do not dictate market direction in the short or intermediate term, psychology does (i.e., fear and greed). Witness the Spring of 2000. best... LIG>>> i have a resistance to all hard and simplified rules, and always look to integrate the two convictions, such the two views above. We have a what first the chicken or the egg dispute. If people are wildly optimistic about perceived future growth that will price stocks as much 10 years ahead of present earnings(when a bubble mania is loose). If doubt starts to build regards the future growth, the market starts pulling back, as market starts turning downwards vast amount of investor simply start developing fear at the their stocks going down, which will lead to more selling. So it can be argued the psychology of the market is ruled by the perception of what will be future growth. Point being there are underlying causes for fear/greed, and it is not a purely whimsical cyle, the Boom/Bust cycle has underlying causes. There is no question a declining economy was the trigger that started the swing towards pessimism. Max

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