Wednesday, November 15, 2006


This BULL MARKET is confounding many investors. They keep selling their stocks only to see them trade higher and higher. They wonder, what is going-on? Sooner or later, there will be a capitulation and many folks will buy back into the market.

The problem so many investors have is that they focus on the "sensational news" which is constantly drummed into their heads. They should stay anchored by studying the fundamentals. During times like these, the news media constantly picks and chooses from the worst of the worst to report as news; the market top will not occur until there is a capitulation in the news, when suddenly it becomes clear to reporters that the market is going to keep going up for a long time because of all the reasons it has been going up. In the world of business and economics there is a steady stream of economic numbers, all of which can be interpreted as bad or good for the stock market. Thus the price of any stock is determined largely by market psychology and not by actual prospects.

The hard thing for investors to fully appreciate is the fact that markets tend to go up when (MORE)