governments create inflation with gov spending and credit...

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    governments create inflation with gov spending and credit creation

    stocks are valued on the basis of earnings going forward

    business will maintain margins

    even if there is no real value being created and it is all inflation profits will go up

    profits drive prices

    technical analysis will always reflect fundamentals

    the degree to which depends on whether you think price equals value

    if price equals value tech analysis is as good as fundamental analysis
    price = value

    when price and value get out of synche technical analysis becomes less valuable as a tool

    price is more a refleciton of emotion and market forces

    I personally think price and value walk in lock step

    that means that I think technical analysis is as good fundamental analysis for the most part

    the minute price is out of synche with value then fundamental analysis becomes important
    thats my take on it



    earnigs drive price

    assets that are scarce will go up in value

    b

    it comes down to the efficient market hypothesis

    you either think price and value are in a one to one relationship

    or you think they are out of synche

    if price reflects value that is it is in a one to one relation then technical analysis and fundamental analysis is as good as each other

    if however price and value are out of synche then functional analysis would be more valuable than technical analysis.

    price wouldn't equal value

    value is measured on earning going forward

    at this point price is not so important all that matters is real business value

    that is all you have got. price is not based on real value but sentiment and other irrational thought

    fundamental analysis will always reflect value
    ie
    earnings going forward

    inflation will occur due to gov spending and credit creation

    but business will always maintain margins

    prices should reflect value

    if inflation affects real value prices will follow






 
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