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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: uu who wrote (25529)	8/20/2002 4:17:08 PM
From: MeDroogies	Read Replies (2) \| Respond to of 39683

The only thing that you mentioned that was "other than" common sense, is the 15 pe as an historic average. Actually, there is nothing historic about that at all. Depending on who you speak to, and the time frames they talk about, that average is anywhere from 8 to 24. Case in point, in 1982 I was taking a class in market economics and the "historic" PE back then was 12. EVERYONE swore by it. By 1987 that had gotten up to about 14. Prior to the 1920's bull market, the "historic" PE was about 8. At the bottom of the crash, PEs had actually risen above that! If that's what you mean by value is arbitrary, then I agree, but that is precisely what makes a market. Value is ALWAYS arbitrary. One man's junk being another man's treasure. High stakes poker - I prefer to think of it not as gambling, though there is an element of this inherent in investing and trading. The major difference is the the more transparent information structure. We can get information about companies and their charts to help us buy and sell better than a high stakes poker game. Still, it does require you taking a position, which is similar to a poker game. But you're gain doesn't necessarily mean somebody else loses. Certainly there is an opportunity loss, but not (necessarily) a real loss (options and short selling can lead to zero sum results). Where will the Dow go? Let's see...the Elliott Wave guys say down, except when they say up (Fibonacci says 9200 is the peak of this trend). Other tech analysis indicates an overbought market, but one in the midst of an extremely strong rally...when technicals typically break down.