"My forte is analysing company's not predicting share prices...

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mike8654

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22/09/16

10:59

Post #: 19340195
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Originally posted by Dr.Who ↑

I agree with you Tumbleroll; it is not analysis per se and proves nothing.

It is predicated simply on the notion of mania, people believe increases in value will go on for ever and despair, people believe selling will not end. Somewhere in the middle we get common ground, hence supply and demand pulling prices towards the mean (regression in the long term). The bubble is burst as people start to take profits (overvalued) and the cycle continues when sellers are exhausted and people see value to reverse prices back to the mean.

The $2.60 has no relevance at all, other than show a mathematical mean.

Yes anything can happen to change the company's structure and the mean will decline as time goes by if there is no improvement in its share price.

Incidentally, what would the mean be if the price stayed at $0.40c for a further two years?

Might be surprised to read $1.99 hardly a major shift from its current mean and would still be an upwards trajectory.

What can we make of that? I think we can all agree that within the next two years the company's shape and prospects will be far clearer than they are today. Therefore, if its survival as a profitable company is known in two years (and it must be profitable or it is finished) then it is reasonable to assume that demand will push the price back to the mean and beyond before the next cycle regresses prices back towards an upwards trajectory mean.

My forte is analysing company's not predicting share prices but I do have an interest in economics including forces at play in supply/demand.

Therefore no, my graph should be taken as nothing more than a point of interest thrown in the with mix of many variables when considering a sound investment. I would certainly not invest anything solely based on regression analysis. I would consider price behaviour (regression analysis) in the overall picture though.

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"My forte is analysing company's not predicting share prices ..."

If that's your forte I predict a rather frugal retirement for you ..

SGH Price at posting: 38.5¢ Sentiment: Hold Disclosure: Held
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"My forte is analysing company's not predicting share prices...

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