Hello Bobcor,
<Have you noticed how many stocks have recovered just to the levels of mid-2008, right before the liquidity event?>
I have noticed recovery, but not as specifically as you have. You probably follow many more stocks than I do and perhaps with much greater precision.
That was the short answer. Stop now or read on for the windbag version <g>
Where stocks were two years ago is not essential to the way I look at the markets. I more concerned about where stocks are going and as I consider the past 23 years more or less a distorted market, I more interested in other variables than historic prices. I use TA (I've been reading Kirkpatrick's wonderful textbook style TA manual recently to further improve my skills), but its more about finding bumps in the road and when a turn might be a possibility. I also follow TA because other people do and expectations about what happens at point X is valuable data.
Why are past prices not so interesting to me? Prices are influenced by too many variables that have absolutely nothing to do with the basic fundamentals of a particular equity. I'm much more interested in determining if those other variables are supportive of higher or lower prices from where we are now, not where we were two years ago.
I follow 33 stocks and ETFs. That is all. Each one is there for a reason and I actively trade about half of them. The other half provide much data on what other monkeys are thinking and doing. Many of those 33 have been on the list for years. The newest one is BP, but I imagine I'll be right clicking on that one by year end and deleting it, as it will be defunct, history, and irrelevant for contributing data to my three ring market combination lock. The one added before that is a small technology company I follow as a favor for a good friend who has invested far, far too much of his personal wealth in this one company.
Those 33 equities are my personal Dow and make up my solar system. The next level is my galaxy, and this includes macro trends, minor commodities, stock indexes, and sentiment. On top is the universe where rates, major commodities, key currencies, and macro policy are tracked.
From those three rings, I hope to develop a working framework for placing wagers in the market.
Right now the combination rings are spinning as I struggle with one key question; is the Fed going to inflate markets, come hell or high water, to prevent implosion?
If the goal is to inflate at all costs, then prices from two years ago won't mean much, as the measuring stick for prices will be changed.
Short take today. Small bounce in markets. Summer sell-off on deteriorating economic fundamentals. Increased political tolerance for more stimulus. Next round of inflation.
There is much more, of course, but it might not be so interesting.
GT
TH |
