I "see" the market through the lens of four primary metrics: fundamentals, technical, structural and psychology.
When viewed in isolation, each of those approaches has inherent flaws.
1. Fundamentals are best at the top and worst near a low.
2. Technical indicators often trigger buy signals higher, on breakouts, and sell signals lower, after a stock has broken down.
3. Structural factors — debt, derivatives and currency effects — can self-sustain in a cumulative manner until such time they overwhelm the system.
4. Psychology, such social mood and risk appetites, can gain momentum until they snap under the weight of the herd mentality.
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Management lies in dropping the last alphabet: manage – men. still better, drop one more alphabet: manage – me.
Samir Kumar Shah.
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