| 3/20/00
(Down) "The New Economy
stocks got hit very
hard today, sending
both the NASDAQ Composite
and the Russell 2000
down sharply. It certainly
looks like the severe
correction we had
anticipated has arrived.
Prudent Investors
should not buy any
stocks at this time
and should continue
to take action to
protect profits. Aggressive
Investors and Traders
should play the market
with bias to the downside.
If you are Riding
the Wave, you should
have your short positions
in place." |
-"The VectorVest
Views"
by Dr. Bart A. DiLiddo
March 20th, 2000 |
Old Joe Granville always
said the market tells
its own story. All you
have to do is read what
it is saying. Unfortunately
for him, he didn’t take
his own advice.
Joe Granville was one
of the pioneers of technical
analysis. He used several
novel methods of "reading
the market." The most
popular of which is On
Balance Volume.
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Initially,
he was quite successful,
and became the market
"Guru" of the early 1980’s.
He was so influential
that his forecasts became
selffulfilling prophecies.
Then he missed the call
on the greatest Bull market
of all time. On August
16, 1982, the market broke
out of a steep slump,
and Joe Granville said
it was a folly. He said
that it was a Bull trap,
rising stock prices were
like balloons that were
about to burst. He remained
a Bear for over 14 years
while the market soared.
What went wrong?
Mr. Granville’s fatal
error is that he went
from timing the market
to forecasting it. There
is an enormous difference
between the two. Market
timers study indicators
of market activity to
determine whether it is
rising or falling. Forecasters
consider economic factors,
and whatever else they
think is important to
predict what the market
will do. Market timers
need never fail. All forecasters
will fail eventually.
Forecasting the market
is theoretically far more
powerful than timing.
Everyone would
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