<<If your assertion was true, then stock prices
would not trade up and down like they do.>>
I must say that you've read far too much into my statement that is not implicit in it.
<< I believe that investors' perceptions about future fundamentals move stock
prices, not the actual fundamentals.>>
To me, "actual fundamentals" must always shape "investors perceptions" which then in turn then moves stock prices. Therefore<<stocks move up and down every day based on
perceptions, not reality...>>Which I agree wholeheartedly except to add that one must remember that perception is often quite close to reality.:-)
<<How else
can you explain the rally in the semiconductor sector over the past couple of
months? Earnings at these companies have not improved yet. The stocks are
moving because investors are predicting that earnings will improve in the future>>---That's right! You've answered the question for me, all in all. Perception of a Fundamantal moves them up. Nothing in TA could have predicted that would happen. But the perception of the fundamental future of this industry could be fundamentally discerned, and investors might know that the fall of the sector was overdone. In other words, No, the prices didn't move ahead of the fundamentals at all- whether earnings have improved yet or not! FA is my explanation for why prices have moved...and it's a fair argument as I hope you can see.
Were just a couple of peaceful souls, I reckon. May TA successfully reduce your risk. I'd shift the emphasis over to FA, but to each his own. |
