undamentally, all market be reconciled in a trade.
activity is a response to
The motivations of buyers and
the interaction of personal sellers are not well enough
opinion. Somebody wants to buy, understood for any very precise
somebody wants to sell, and theory to be constructed around
thereby a market is made. them, but it seems reasonable to
Either way, the impulse launch this chapter, and the two
represents a human judgment of which follow—all of them
how business is going, how the concerned with the hard
market is reacting to the information that presumably
business trend, and how, under influences investors—with some
these circumstances, this stock recognition of the emotionalism
or that one will fare. The that is also involved. Much of it
fascinating thing is that is highly sophisticated these
regardless of the situation, two days; it has been a long time
essentially contradictory points since the blind panic of the
of view—to buy and to sell—can dreadful days that heralded the
always be reached.
Crash and the depression; but it
Information can move a share is emotion nevertheless.
price or currency dramatically,
As recently as September,
even if it is not 100% 1955, when the market plummeted
correct.
nearly 32 points for a loss of
The same influence may not $14 billion in values on the news
govern each case; the man who of President Eisenhower's heart
buys Alcoa may have become attack, we had dramatic evidence
convinced that aluminum has a that the market does not have
bright future, while the man who absolute control of its nerves.
sells may simply be taking a And, by contrast, in December,
profit on his holding; but the 1957, the market recovered in a
fact remains that differences can few hours the losses occasioned
by momentary alarm over the the impact of tomorrow on their
President's cerebral occlusion. fortunes.
There are, of course, many
Since the future is largely a
practical—and credible blank map, investors must do the
—explanations for both responses: best they can with whatever
the first occurred as an election current information they can
year approached, Ike's symbolic acquire to carry them to the
importance was still immense, the frontier of tomorrow.
business philosophy he
Much of it—make no mistake—is
represented was in jeopardy, the extremely useful. But it must
second occurred at a point when also be said that in the absence
the fact of an ill president had of sure-fire criteria, the
already been discounted, Ike's investment world examines every
political significance, as a scrap of possibly relevant
president who could not succeed information for clues.
himself, was on the wane.
The result is that the new
Etc.
investor, eager to acquaint
Undeniably, however, all of himself with business and
these arguments were based on financial news, soon finds that
guesses as to the shape of the his problem is not obtaining
future, given one set of information, but digging himself
circumstances or another. And it out from under—and discovering
is the unpredictability of the how to evaluate—the flood of
future which inevitably injects facts and statistics that
emotion into stock market inundates him.
transactions. Pondering the past
Do not be dismayed. In the
and scrutinizing the present, first instance, you are reading
investors—professional and for general information, to
non-professional alike—seek signs familiarize yourself with the
and portents which will predict field.
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