Markets are not Oracles

The danger of predicting the future based solely upon “what the markets tell us“. Not everything of value is priced accordingly by the markets.

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1 Response to Markets are not Oracles

  1. Rivrdog says:

    …and the markets are now dominated by the day-traders, which throws all those theories of prediction into a cocked hat anyway.

    The present market levels (Dow 11,000) would have NEVER been arrived at in a market dominated by institutional investors of a solid caliber.

    The day-traders hold stocks for a few hours, derive a small gain based on some very transitory market quirk, then dump them as soon as their second-by-second analysis tells them that the bump is fading. Yeah, there are bucks to be made doing this, but since these people came into hegemony as the main investors on the Street, it has ruined the market as a solid predictor of our economic well-being.

    …and, there is another bubble-burst just around the corner that will take the Dow back down, probably below 8,000 again. That bubble-burst will happen just after the November election, if the Pelosi-led House isn’t replaced by conservatives. Chances of THAT are now MAYBE 50%.

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