Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: pezz who wrote (25364)	11/12/2002 3:05:22 PM
From: Moominoid	Read Replies (1) of 74559

Again, I am not talking about an individual security, property etc. but the expected return on investment in general economy-wide. You would only expect LU to diverge from that economy-wide average if either you could show that it was currently undervalued or that you had good reason to think that its growth would accelerate, risk decline etc. but the market as a whole didn't think so. In the short-run stocks overshoot, undershoot etc. their true intrinsic values - that's where there are trading profits which are likely zero sum. Or rather traders take a little money off investors for providing the "service of market liquidity".

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