The Whisper On Wall Street

banker xSometimes, actually quite often, stocks act irrationally on Wall Street. The notion of a ration approach to picking stocks has been disproven over an over again whether through illegal inside information, select calls to analysts, channel checks of merchandise revealed to those “in the know” or out and out fraud.

One of the most perplexing notions is that of stocks trading based on how their earnings come out. Twenty or thirty years ago an investor could be pretty sure that the stock he owned would go up or go down based on how well the underlying business performed. It would report earnings and if those earnings grew at the rate that the analysts were expecting as revealed in published research reports and from organizations like ValueLine or S&P, the shares would go higher. If not, the shares would move down. Mr. and Mrs. America planned their entire retirement and savings plan around these predictable events.

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