daytrading feb 14 morning, page-133

I like the topic of 'is the market always right'.

There are many ways to look at it however I will postulate the following.

-The market is always right in the context that despite what anyone values it at, you can only sell at a price someone in the market is willing to buy.

-This does not mean the market will not value it higher or lower in the future, thus your evaluation can be higher than the market, and be correct and the market is still correct. Most people would find this counter-intuitive.

-Time is the element of the market most hard to predict. We obviously can see the past but not the future thus we rely on the past to give evaluations. While this strategy works to a certain degree it also depends on our full knowledge of the past situation.

-The market is inevitably set up to trick the week minded. An example of this is say you by at 25c then sell at $1. Thats a gain of 300%. When you buy at $1 and sell at 25c thats a loss of 75%. People often forget percentages are inverse and can rationalise losses by looking at % rather than actual $ figures.

Cheers,

N.