Newspaper article THE JOURNAL RECORD

Stock Market More Mysterious Than Ever

Newspaper article THE JOURNAL RECORD

Stock Market More Mysterious Than Ever

Article excerpt

NEW YORK -- If such a thing is possible, the stock market in the late 1990s seems to be getting even harder to figure out than it was before.

According to academic theories of the "efficient market," the question of where stock prices will go next has always been an unsolvable riddle. The doctrine says that everything that can be known or suspected is already factored into stock prices.

But at least in the old days, it usually seemed as though there were some sort of prevailing trend in the marketplace, whether up, down or neutral. In the postmodern stock market, by contrast, everything seems to be crosscurrents within the market, moves from one type of stock or industry group to another. Thus, you may experience such strange phenomena as supposed bull markets where you don't make much money. Take right now, for instance. Asked what the stock market has done so far in 1999, an investor might be hard-pressed to give any sort of clear-cut answer. "The market has something for everyone," observes Norman Fosback in the newsletter Mutual Fund Forecaster in Deerfield Beach, Fla. "Superbullish? Focus on funds specializing in the very largest stocks, especially those with a technology orientation. "Bearish? Then take note that approximately two-fifths of all equity funds are BELOW their levels of last April." To judge by the best-known market averages, 1998 was a terrific year for stocks. "But what you don't see in the numbers is that it was also a very volatile year," notes Bob Hill, technical research strategist at Fidelity Investments in Boston. While the Standard & Poor's 500-stock composite index climbed more than 25 percent, "the average stock traded on the New York Stock Exchange ended the year down 6 percent," Hill says. "There's really no historical precedent for the market we had in 1998. …

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