Can market movements really be predicted? Many people believe otherwise. There’s a long held perception that markets are completely random. So, in this article, I intend to use some simple examples to test this thinking. Seeing how the market really works for the first time was a complete mind shift for me. My initial perception that markets are completely random was quashed the moment I began to acquire the knowledge and understand how the share market really works. Let me say, once you get an education about the market, how you view it will change forever, and in my opinion, for the better.
You may have heard about the ‘random walk’ theory, which suggests that the market is completely random; that past movements in price cannot be used to predict future movements. Even today, this subject is still hotly debated, despite the advances in technology that provide access to an incredible amount of information, and the government loan scheme VET FEEHELP, available through many training organisations.
To understand what’s really going on, the saying ‘seeing is believing’ couldn’t be more true. The bottom line is: you must acquire the knowledge before you can give a qualified opinion. Moreover, there’s so much in it for you to gain personally by finding out.
At least ten years ago, I recall attending a seminar on the subject of company fundamentals. I conversed with an older gentleman about the market and various stocks. He declared that he was a staunch fundamentalist, and seemed very conservative; starting from his neatly trimmed hair, which was thinning and grey, to his V-necked sweater and pressed faun trousers.