Are macroeconomic trends and stock markets really connected? Many people think not. The stock market deceives many with the impression that it is not really connected to the real economy. One can’t be more wrong believing that the markets don’t work on economic logic. Markets are closely tuned to economic logic. In fact, the markets are always smarter and tune into economic trends well ahead of the actual events. Most investors, however, wake up after the economic events and invest well after that. Then, they wait hoping that the good times will bring them profits. Investors must realize that the markets anticipate good times well ahead and take the profits when the masses come in. Now, the masses are still watching as smarter investors are logging into equity. Waiting is an art when it comes to stock markets. But, it delivers only if the waiting is done after investing well ahead of the herd.
“All intelligent investing is value investing — acquiring more than you are paying for.”