Forex trading – Even if the investor knew the earnings results several years off, he would not even then know at what price the stock would sell because: (a) common stock valuation almost always can differ by between 12 to 15 per cent; (b) much larger differences in valuation result from changes in the market valuation of a dollar of earnings.

If large and small investors were persuaded of the foregoing, much disappointment would be eliminated and less confidence would be expressed in the future price movements of stocks. Instead of the assurance that X Manufacturing stock will sell at $65 per share, it would be more frequently said that the stock of X Manufacturing should sell at $65 per share. Economic, financial, and industrial conditions change too rapidly to permit accurate forecasting of earnings three to five years hence. As the professionals say, there are too many “imponderables.” This is merely a way of saying there are too many uncertainties. Phases of the business cycle may not recur in the way that had been anticipated.

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[tags]Forex Trading Strategy[/tags]