Zeev's Turnips Patch-No Politics (ZEEV)

[osprey]

Well said Joe. Stocks actually represent tangible entities in the real world even though sometimes it seems they are just letters and numbers on a computer screen that move around. Warren Buffet calls them part ownerships of companies (they are). In the end, fundamentals always win.

For pure daytraders with a time frame of hours, this may not matter one iota. But many people reading this thread are swing traders, stock pickers, longer term buy and holders. And many people do both, if I got it right even Zeev has a "core" which doesn't end up all cash at the end of every day.

I find valuations just part of the million piece jig saw puzzle. If they are really high relative to common sense historical norms of p/s, p/e, book value one can assume they will correct to the norm sooner or later, usually rather than the p/e moving up, the stock price moves down and undervalued, vice versa. Even daytraders would want to know this. If you are short when undervalued stocks are trending upwards, this is fighting a head wind.

I myself like more tailwind. Since by most measures such as p/es this market is now overvalued, when the trend changes as it inevitably will, the next leg will be down. The big question is when and how much.