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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: greg nus who wrote (11053)	12/8/2000 3:24:18 PM
From: Math Junkie	Respond to of 42834

"I submit if you know the defination of bata defined as the difference a particular stock moves in realtion to a given move in a general market index such as the nasda or the dow, expresed as mathmatical equalivant." From your description, I assume you're referring to beta. If so, it sounds like we're in agreement as to its definition. "Simply said if a tech stock has a high bata factor lets say of 2.0 it will move twice as fast 2x or two diviations up or down from a given movement of it's index. So if you know the defination you don't need a model to tell you predicably what will happen. No model is nessary." Where the model enters the picture is in forecasting the direction of the broad market index. Tech stocks don't always track the broader market, but the odds favor general market weakness being accompanied by even greater weakness in tech stocks in most cases. That is why it doesn't make sense to claim that new technology makes Bob's model irrelevant. If his model works for the broad market indices, then it will have at least some applicability for technology investing. Conversely, if his model does not work for the broader indices, then it would not be likely to work for technology investing. That is all that I am saying.