07-23-2009, 05:47 PM
Dustie Wrote:Vllad Wrote:I don't understand how the stock market is any indication of economic recovery. The stock market is where people buy things with the hope that in the future they will increase in value. When stocks are really cheap you having nothing to lose so you can hang on to risk for much greater periods of time.
Good Dow could also mean we are in the middle of the disaster.
I just have a hard time connecting the stock markets to economies. They sometimes connect but sometimes they don't.
Vllad
When you buy a stock, you're essentially buying the future earning potential of the underlining company. Stock markets' use as a leading indicator is only as good as the collective wisdom of the market participants.
Vllad is totally right, the market is a lagging indicator, but everyone touts it as the leading one.
Gameless (for now)