TA discussion, page-5516

Yes a semi log price chart is so much more meaningful than an arithmetic scale, as the slope of the line is valid for gr0wth rate (positive or negative) between any two points, whereas a constant growth percentage in an arithmetic chart traces an exponential curve, which is misleading. In your chart one can see the two episodes of excitement and the nearly two years of gradual pullback as expectations were progressively not met. I feel that whatever low we hit as the world heads towards a one day war, should be the bottom of this two year trough.

My studies of the effects of war on share prices reveals that the market low invariably coincides with the result being predictable. In the case of the US-Iraq conflict the market bottomed once in March 2003 it knew when it was starting, as it was always going to be one-sided. So markets may continue to dip as uncertainty increases, but in the event we do get a 4 missile launch against Guam then we presumably will get a military response from USA. Wars have a nasty habit of escalating, but presumably China, Russia and the USA will have tacit agreements that something had to be done about this rogue state. Markets might actually bounce on the news that a global threat has been eliminated. Or am I too much of an optimist?