[PeterisP]

It's not about abstract belief in a bunch of bureaucrats, it's about waiting on the very, very large flows of money that these bureaucrats might open or redirect. The investors' pockets don't care if the dollars in them were created by the real economy or the fed.

[H8crilA]

This is the type of groupthink that gets one in trouble. I'd rather base my decisions on real world business performance.

[PeterisP]

All short-term market fluctuations are more based on groupthink than on real world business performance. Even when there's a fundamental, strong, unavoidable real world business reason for the price to move significantly, the timing of that price movement will be determined mostly by the groupthink and not the real world business reasons (the classic "the market can stay irrational longer than you can stay solvent").

So if your decisions are of the type "what should I buy and hold in the long term" then definitely real world business performance is key as that will determine where that price will be in a couple years. But if you're not going to hold the same position for long and are trading on markets, well, groupthink is a very, very influential factor that determines the price you're going to get today or tomorrow.

[H8crilA]

Totally agree. And I do think short term trading gets people in trouble :). At least the vast majority of people. Not everyone is cut out to be a top notch speculator like Soros.