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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (7528)	9/7/2001 8:41:38 AM
From: MetalTrader	Read Replies (2) \| Respond to of 23153

Ray, Thanks for the link, I hadn't read the article. It very clearly states a position I've had regarding valuations. It also begs the question, now what? Since the credibility of analysts has been plundered so dramatically this year it would be predictable that the blame will be rolled elsewhere whenever possible. The issue of accounting has become huge and is going to have to do one of two things. Either the most conservative procedures will be reinforced, or the reported results become largely irrelevant. One would hope for the former. If that does not occur or until it does, I would suggest investors large and small will give greater weighting to non-fundamental analysis. If reality is perceived as being unmeasurable there will be a migration to quantifying perception. Technical indicators will become the coin of the realm with predictable results. Although I am a proponent of charts and technical analysis should it become a more dominant determining factor for investment decisions we will find ourselves in a very volatile investment environment. One of the criticisms of technical analysis has been that it is a self fulfilling methodology. (I've never considered that a criticism in fact) However if each technical inflection point becomes the focus of a greater number of investment decisions we could expect heightened volatility each time stock crosses a moving average, or touches a support line or an A/D line reaches some predetermined point of reversal Rather than looking forward to a company's future business prospects, more and more investment decisions will be made reading the tea leaves and trying to figure out if that was a meaningful doji, harami or abandoned baby. Personally I'd rather see good 'ole GAAP carry the day but I expect it won't be easy. MT