Paul, ever read the book, " A Random Walk down Wall Street" ?
I think that is the title. Anyway, if you did not read it,
this book proposes that our markets are efficient.
Your statement, "there's always someone who knows more and will dump before anyone knows what hit them." is the basis for my current
beliefs in stock market investing. Namely, IT IS NOT a RANDOM
WALK. This is because everyone DOES NOT get the same information
at the same time. With this fact alone - that book, which is required
reading at some business schools - is a B.S. book.
Why else are there run ups days or weeks in a stock's price
just before a company announces being bought out. One of my
favorite examples is LOTS, Lotus just before they were bought
out. Obviously the pee-ons (me and most other people) are not
getting the same information in a timely manner. So, since we
can not get the same information as the rich people, are we forced
to look at strange and abnormal volume characteristics and the
options markets for large puts and calls? What else is there
(for the pee-ons) to indicate that big news has leaked?
Perhaps, a witch board, tee leaves, etc.? |
