Let’s talk about “inside information” and the stock market.
At some point we have to come to this realization: we’re never going to have complete information — EVER — when it comes to a particular stock or investment.
There will always — I repeat, always — be someone around who has more (better) information than you and I. That could be inside information, or someone who just has their ear a little closer to the ground than we do.
I keep telling everyone: getting your ideas about stocks (and the market) from the media, is a really bad plan. See, we need to make decisions TODAY, because waiting to get all of the facts will always cost us money. Always.
So, how do we make decisions without all the details?
Well, the point and figure charts that we use to manage your money tell us what’s happening — right now. When a stock (or a mutual fund, or a commodity) is in demand, the chart moves up in a column of X’s.
See, the charts don’t wait for the news, or the headlines, to be released. They tell us, without emotion, what’s in demand and what’s in supply. Anything with too much demand will see its price rise. If there’s too much supply — prices WILL be falling.
If the premise of supply and demand works for stuff like Cabbage Patch Dolls and Talking Elmo, why wouldn’t supply and demand work for the stock market?
For some reason, most people in my line of work like to make things much more complicated than they need to be.
Don’t forget that!