07-24-2009, 10:35 AM
I think in order to have this discussion you'd need to find a neutral point between leading and lagging - ground zero so to speak. The concept itself is also in flux depending on what aregument you want to make. And I need to take back what I said, because I mis-spoke.
It works like this:
Say you're building a house. The leading indicators of building said house would be 1 does the demand for build a house exist, is there enough money in the bank to fund the building of a house, are the resources present to build the house, are there enough people to build the house, do the people have the will to build the house (perhaps they could make more money doing something else), etc. Ok so let's assume all of these prerequisites now exist, only NOW do you have the ability to perhaps predict that construction company XYZ has a bright future ahead of it. BUT even at this point it is still a guess, and therefore intangeable, so I think you'd actually be better off making the arguement that is is neither lagging nor leading, it's nothing more than a guess.
Still though, I think it is more a matter of perspective than anything else. To a 90yr old, 60yrs of age is young. To a 5 year old, a 22 yr old college grad is old! So from my perspective, the conditions that have to exist in order for the market to "Be", are leading, while the conditions that result from what the market "Is" are lagging.
It works like this:
Say you're building a house. The leading indicators of building said house would be 1 does the demand for build a house exist, is there enough money in the bank to fund the building of a house, are the resources present to build the house, are there enough people to build the house, do the people have the will to build the house (perhaps they could make more money doing something else), etc. Ok so let's assume all of these prerequisites now exist, only NOW do you have the ability to perhaps predict that construction company XYZ has a bright future ahead of it. BUT even at this point it is still a guess, and therefore intangeable, so I think you'd actually be better off making the arguement that is is neither lagging nor leading, it's nothing more than a guess.
Still though, I think it is more a matter of perspective than anything else. To a 90yr old, 60yrs of age is young. To a 5 year old, a 22 yr old college grad is old! So from my perspective, the conditions that have to exist in order for the market to "Be", are leading, while the conditions that result from what the market "Is" are lagging.
Gameless (for now)