From: gts (gts_2000@yahoo.com)
Date: Fri Jun 13 2003 - 07:32:09 MDT
Dossy wrote:
> So, how do you profit in the market?
> Try to guess where the demand is going to be.
Problem is that stock prices are themselves the best predictors of demand if
you are referring to the demand for goods and services.
It is, for example, quite absurd to look at the economy in an attempt to
predict the stockmarket. Yet hopeful people do it all the time. One can
hardly watch the business news without seeing some talking head make
predictions about the market based on the economy.
But economic data doesn't predict stockmarket data. Stockmarket data
predicts economic data! It is for this reason that the stockmarket is
included in the index of leading economic indicators.
The same principle applies to the shares of individual companies. If you
want to make a best guess about the business performance of Acme Widgets in
the future then take a look at Acme Widget's stock performance in the
present. Your guess might be wrong but there is no better way to make the
guess.
-gts
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