Listening To The Market by Danish Kapur
Hello, Can You Hear Me?
Are there ways that investors can listen to what the market may be trying to tell us?
Make no mistake about it: When the market is about to change course, it is not going to call you and tell you of its plans. However, there are ways that investors can listen to what the market may be trying to tell us.
What are the signs? Are there any obvious clues that we should pa1y attention to that are signaling a change in the markets? Maybe youíve encountered some of these situations before: Analysts start talking about how a particular company will do 30 or 40 years from now. People start assuming that a particular company will grow larger than all other companies in its sector combined. Investors start fantasizing that an unprofitable company with outrageously high valuations will soon be generating huge profits. Everyone starts thinking that the conventional wisdom and methods of evaluation no longer work. People start borrowing money at an astonishingly high rate to invest in incredibly overvalued stocks. But here is where you should stop and listen; when these types of scenarios start occurring, itís a good indication that the market is saying something. Those who continue to ignore its message will most likely soon pay a heavy price.