| There is an old Wall Street adage whose meaning | | | | stocks of obscurer companies, such as are listed on |
| brings keen insight into prospects likely ahead for the | | | | NASDAQ? This may seem counter-intuitive, but this |
| U.S. stock market at any given moment in time. Its | | | | latter scenario, generally speaking, is more indicative |
| fundamental message reveals a simple truth about | | | | of such underlying strength as is necessary to put |
| not only stocks, but any investment asset one might | | | | stocks up and keep them there. Look at it this way: |
| consider buying or selling. To wit: for rising prices of | | | | if among the thousands of alternative issues on |
| anything to be sustained an increasing interest in | | | | which investors can bid the obscurer companies are |
| owing the thing must be ever-present. This is true no | | | | receiving greater interest, then it is quite likely an |
| matter if it's stocks, bonds, gold, real estate, or | | | | environment conducive to the smooth functioning of |
| goat's milk. Listen to the old Wall Street adage... | | | | all enterprises exists. Thus, those more obscure |
| "Prices can fall of their own weight, but it takes | | | | companies are more likely to flourish. However, one |
| buying to put them up." | | | | must also appreciate the risk that, a time might come |
| One's first reaction might be to think, obviously(!) "it | | | | when irrational exuberance desiring ownership of |
| takes buying to put [stocks] up." Yet Wall Street | | | | these more obscure companies is ruling the day. We |
| being a place where complacency is no stranger, one | | | | saw this leading into Y2k and the result was not |
| is well-advised to think about the substance of buying | | | | pretty. |
| driving prices higher. What strength do those whose | | | | Second, look at the velocity at which money is |
| money is at stake demonstrate? Does this strength | | | | gravitating into stocks. Over the course of an |
| bolster the perceived capacity of owners to endure | | | | advance you want to see the volume of shares |
| times of trouble that are sure to become present (a | | | | exchanged increasing. Increasing volume reveals two |
| truth as natural as the sun's rising and setting)? Will | | | | things: |
| those buying equities demonstrate a willingness to | | | | |
| add to their positions when inevitable periods of | | | | 1. Investor fear is rising as prices increase; this fear |
| weakness come to pass? Or will these folks rather | | | | translates into such "worry" as leads investors to sell |
| capitulate and sell their stakes, only compounding | | | | their shares, which is why they say "the stock |
| weakness when it invariably sweeps upon the scene? | | | | market climbs a wall of worry." |
| The point this Wall Street adage should drive home is | | | | 2. Ownership interest likewise is rising, despite |
| that, something more than mere price increases | | | | growing fear among present owners; these investors |
| reveals the strength of buyers putting stocks up. | | | | demonstrate willingness to buy at ever-higher prices |
| And if there were an investment realm where a | | | | and are a vital element of strength needed to "put |
| wealth of information exists, helping investors assess | | | | [stocks] up." Finally, consider participation coinciding |
| the substance of strength possessed by buyers | | | | with an advance over some period of time. You |
| bidding prices higher, the stock market is it. To my | | | | want to see an ever-widening swath of listed issues |
| knowledge there is no other investment forum | | | | joining the party as prices in general are being driven |
| offering such a wide array of measures whose | | | | higher. Keep an eye on the cumulative |
| objective assessment makes it possible to discern | | | | advance-decline line for both the NYSE and NASDAQ. |
| the viability of continued price increases. | | | | A picture, indeed, is worth a thousand words. |
| First, look where money is gravitating. Is it going | | | | Of course, there are other benchmarks an investor |
| more toward widely-held issues of companies | | | | likewise can assess and gain a better handle on |
| deemed rock solid mainstays of the business world? | | | | future prospects in the stock market. Although those |
| Here in the U.S. one finds these companies | | | | mentioned here are but a small sampling, their |
| represented in the Dow Jones Industrials Average. | | | | message nevertheless can provide investors insight |
| Or, contrarily, is money more so bidding up the | | | | into whether great risk or opportunity is present. |