Abstract
A study of fundamental economic factors, such as the outlook for business, interest rates, and capital goods expenditures, is of vital importance, of course, in weighing the probable future trend of security prices. An appraisal of the direction of the market itself, however, is also important. It is difficult to recognize important market turning points because stock prices are constantly being adjusted to future economic conditions. Stock prices at any time refle.t present basic values and future earnings prospects. Current economic conditions may have but little bearing on current stock values, as the direction of the price movement may be reflecting economic conditions to prevail months ahead.
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