Tuesday, April 07, 2009

Market Analysis

I must say that the analysis I read of the stock market really boggles the mind a bit. One wonders if those making investment decisions are really as short-sighted as this supposedly expert analysis implies.

Today, the Dow, as of the time of this writing, has dropped almost 3%. This article explains that this drop is explained by anxiety over upcoming first quarter earning reports. However, this calls for answers to certain questions. Over the last four weeks, as stocks have risen nicely, did it not occur to investors that we would start getting first quarter earning reports in April, as April, strangely enough, comes just after the end of the first quarter? And, when one was contemplating the possible surprise of first quarter earning reports following the conclusion of the first quarter, did anyone really expect those to be good based on all of the other economic news we have had over the last several months?

All of this might cause a reasonable observer to ask: if all of these observant people were aware that first quarter earnings reports follow soon after the conclusion of the first quarter, and if they were aware that earnings were not likely to be good, why are they experiencing such anxiety about the coming release of those reports that they caused the market to drop 3% this morning.

The one who explains that in rational terms might deserve a Nobel prize.

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