>BTW do you buy the theory that Fidelity Low Priced Stock espouses. Cheaper (in terms of $ value) stock => better returns all else being equal? I actually think there is, don't believe that there should be (liquidity maybe explains it), but buy my stocks believing there is such an effect!
Shane,
Let's complicate that paradigm. I believe that there are 2 factors, in contradiction, fighting for supremacy. As more boomers get "into the market", there are more and more $$$ chasing stocks. The theories espoused by these newer investors largely determines stock price movement. The two theories are:
1. Bigger = Better, The trend is your friend, Nifty Fifty, etc. New investors see the appreciation of DELL, INTC, MSFT, IBM, LU, KO, G, etc. and decide to get in on that (which, of course, drives them up more).
2. Value lies in unappreciated companies (how did you say it, the 3 "d's"?) The investors buying here think "my company has value that will be acknowledged sooner or later". These groups typically do mucho research to find companies on the cutting edge of trends.
Now, to get cynical. "1" represents underinformed, underresearched $$$. This money simply finds the stocks with the steepest charts, and makes them steeper (look at a DELL chart lately?). "2" represents thoughtful, intelligently placed $$$.
Back to econ 101, the more "1" $$$ there is, the more the trend is your friend. The more "2" $$$ there is, the better "value stocks" will perform.
Unfortunately, if you compare LSI to the nifty fifty, you can guess where I think the money is going.
PS. TSO, I've heard about enough of those heathens from tu and their fancy litho project. Now, if it had happened at A&M... (spoken for Aggies everywhere! <G>) |
