Now that seasonal investing habits is upon us after a nice run of January effect. We expect moderate summer investing. The professionals(brokers) are still active, where they may be scanning over 150 stocks to look for activity which is more intense. Daytraders too are searching for opportunities for small gains.
The traditional ebb and flow governs the professionals to do herd mentality investing, where they can eke out a living from specialists and market makers, day trading. Usually they invest twice a week, either short or long on what the herd is moving to. Then return to cash, before the week ends. Hand to mouth type of living on profits made.
Yesterday is typical. where GE was big mover in late morning, then IBM took over near closing. Yahoo never did excite any traders, because Jerry Yang is nice but not commanding in acquisition nor divesting in the business world. Consolidation(vertical integration) and/or diversification(business branching out) is how economy is built. Recent excitements are privatization of public companies, when interest rate is lower than profit margins.
After Labor day, we will have another nice move frequently short lived until October 15th. the rest of the year will be just drifting, pulled back, ready for the next January effect. Small investors will be looking for bargains near the end of December.
This trend can not be changed over the many years that I have been charting. The only thing that we find effective is 401k retirement plan keeps money flowing to Wall street. If they took care of value investing, then drifting means side way zigs and zags, there will be more where it comes from, a certain percentage of wage income. This takes planning in a big way. If Wall street pulls back too severely like 2001, then the investment coming to Wall street suddenly disappears, partly due to all that wealth disappeared with mysterious stock value. Coming back took many more years of rebuilding stock value, which we are still working on?
What more is left for us to do, is to offer internet online brokerage as easy as 1-2-3 for global fund deposits and withdrawals. Then all the cash payment for trade deficit will come back as online stock investments? |
