

What the Stock Market Really Thinks About the Economy - bdr
http://www.fivethirtyeight.com/2009/03/what-stock-market-really-thinks-about.html

======
jwb119
its hard to find something like this convincing when the "index" that is the
core of his argument is only taken back to 1998

------
JacobAldridge
We've been running a series of workshops [1] which include looking at stock
market information like this and applying it to the broader economy. The
principle is that because the market _"ought to reflect anticipated future
profits"_ of businesses it can be used to make some predictions about the
broader economy 6-12 months ahead.

Ie, if the market goes down, the economy will move down in 6-12 months. And
the market turning around will foretell a broader turnaround in 6-12 months.

One common mistake to be avoided [2], which the five points in this article
cover, is that not every sector and certainly not every business is tarred
with the same brush. I particularly like the example that investing in Wind
Power might help the economy while harming the Stock Market.

Just because broader things are down, doesn't mean you and your business have
to be.

[1] [http://www.shirlawsonline.com/events/257-thrive-not-
survive-...](http://www.shirlawsonline.com/events/257-thrive-not-survive-
workshops) [2]
[http://www.shirlawsonline.com/assets/0000/1868/The_Five_Mist...](http://www.shirlawsonline.com/assets/0000/1868/The_Five_Mistakes_of_a_Recession.pdf)

------
nav
This is a great post. there any many insightful articles out there, all of
them with insightful comments/theories. My personal opinion is that one should
wait for Q1 reports and base forward judgments of the market based on what
results and fundamental investment/market theories. The only thing the market
has taught me over the past 8 months is that media is ever-permeable and fear
mongering doesn't just exist in politics.

