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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (656)	11/11/1997 7:55:00 AM
From: Arthur Tang	Read Replies (1) of 1471

How does company performance come into the servo-mechanism equation? If the company performance improved a great deal, then, the demand for their stock goes up. The market makers either use negative feedback or positive feedback to control the stock distribution. If the company perfomance suffers, then, the market makers either use negative feedback( move the price up ); or use positive feedback( pull back severly ) if they have borrowed stocks to buy back. If the company performance is steady; then the market markers could only use negative feedback to control the price. However, if there is a story, then, it is like either the company is performing or not, discribed above. This fully describes the actions the market makers can take; thus, the investors can anticipate the volitilities if any. And sadly, anticipate their stock just drifts along, with no story or no news.

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