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  • Suggest You - The Smart Investor Waits For Events That Will Disturb Markets

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    rs heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to even

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    Within the last several weeks the Federal Reserve announced its long range goals for the economy and the stock market rallied.

    But then, several days later, the Middle East ignited once more, sending markets sharply lower.

    The Fed’s policies quite rightly inform stock valuations, because the Fed directly influences interest rates. When rates rise, investors have the option of moving their money to bonds, to CD’s, and to other interest bearing vehicles, and out of equities.

    But what does the Middle East have to do with the value of Altria, parent company of Phillip Morris, maker of Marlboro cigarettes, and majority owner of Kraft?

    Altria, along with most other big stocks dipped when investors heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to event

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    gnited once more, sending markets sharply lower.

    The Fed’s policies quite rightly inform stock valuations, because the Fed directly influences interest rates. When rates rise, investors have the option of moving their money to bonds, to CD’s, and to other interest bearing vehicles, and out of equities.

    But what does the Middle East have to do with the value of Altria, parent company of Phillip Morris, maker of Marlboro cigarettes, and majority owner of Kraft?

    Altria, along with most other big stocks dipped when investors heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to even

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    investors have the option of moving their money to bonds, to CD’s, and to other interest bearing vehicles, and out of equities.

    But what does the Middle East have to do with the value of Altria, parent company of Phillip Morris, maker of Marlboro cigarettes, and majority owner of Kraft?

    Altria, along with most other big stocks dipped when investors heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to even

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    the value of Altria, parent company of Phillip Morris, maker of Marlboro cigarettes, and majority owner of Kraft?

    Altria, along with most other big stocks dipped when investors heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to even

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    rs heard about Lebanon. With world tensions rising, you’d think people would smoke more and Altria would spike on such news.

    This example shows that markets overreact to events.

    You can take advantage of this fact through diligent observation and patience because bad news is cyclical. There is regularity to it, despite its erratic appearance.

    Before 9/11, for example, there was a period of unusual calm, an absence of bad news, especially for the United States. If you live in the Midwest you know that there is an eerie calm before storms, and you can take your cue from it, and seek shelter.

    Recently, a stalemate was preventing progress in the Mideast, and pressures were building. The sensitive investor could have predicted there would be an aggressive change in the status quo.

    Moreover, the Group of Eight conference was convening in St. Petersberg, and this even

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