Thursday, April 19th
Dear Member,
Take a look at this quote:
"The Dow Jones Industrials Closed Above 12,800 for First Time in Mixed Session on Wall Street: NEW YORK (AP) -- The Dow Jones industrial average closed above 12,800 for the first time Wednesday, signaling Wall Street's recovery from its steep decline in February as investors rewarded companies with strong earnings."
Well, it's true. And why not? Because in the long run, it's all about the earnings. It really is. The reason a stock like Microsoft went up like crazy for 20 years is because they kept making more and more money all the time.
It's not only about the earnings however, it's about guidance too. That's why I am the most bullish on companies in the commodity sector. Especially companies that build equipment to help you dig anything out of the ground. Because, whether commodity prices rice or fall, the trend is up, and people will just keep digging more of it out of the ground. So, whether you have good management team, of just "okay" management, there will be a lot of demand for the goods you manufacture.
That's why "bottom-up" only analysis is useless. It doesn't matter how good your management is, if no one wants to buy your products. Top-Down analysis focuses on major economic trends, and then you look at the companies after you know the trend.
It's just so simple sometimes. You don't need an MBA or Ph.D to figure this stuff out. Remember the story I told you about the Wharton MBA mutual fund manager that came and spoke at my company who said that AOL would be the biggest company in the world one day. We all looked around the table at each other with the look on our faces, "Is this guy some kind of lunatic?" Then, the AOL / Time Warner "merger" I like to call it even though AOL "bought" Time Warner was the biggest sign of a top in the market I had even seen because two lunatics just put those companies together.
Good Trading,
IntradayTrades
Dear Member,
Take a look at this quote:
"The Dow Jones Industrials Closed Above 12,800 for First Time in Mixed Session on Wall Street: NEW YORK (AP) -- The Dow Jones industrial average closed above 12,800 for the first time Wednesday, signaling Wall Street's recovery from its steep decline in February as investors rewarded companies with strong earnings."
Well, it's true. And why not? Because in the long run, it's all about the earnings. It really is. The reason a stock like Microsoft went up like crazy for 20 years is because they kept making more and more money all the time.
It's not only about the earnings however, it's about guidance too. That's why I am the most bullish on companies in the commodity sector. Especially companies that build equipment to help you dig anything out of the ground. Because, whether commodity prices rice or fall, the trend is up, and people will just keep digging more of it out of the ground. So, whether you have good management team, of just "okay" management, there will be a lot of demand for the goods you manufacture.
That's why "bottom-up" only analysis is useless. It doesn't matter how good your management is, if no one wants to buy your products. Top-Down analysis focuses on major economic trends, and then you look at the companies after you know the trend.
It's just so simple sometimes. You don't need an MBA or Ph.D to figure this stuff out. Remember the story I told you about the Wharton MBA mutual fund manager that came and spoke at my company who said that AOL would be the biggest company in the world one day. We all looked around the table at each other with the look on our faces, "Is this guy some kind of lunatic?" Then, the AOL / Time Warner "merger" I like to call it even though AOL "bought" Time Warner was the biggest sign of a top in the market I had even seen because two lunatics just put those companies together.
Good Trading,
IntradayTrades
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