Market Review and Trends
Newton’s Law in the Market
By EquityWatch  •  August 30, 2012
Isaac Newton famously told a story of how he was inspired by an apple falling from a tree while out drinking tea. He wondered why an apple has to fall perpendicularly to the ground instead of sideways or upwards. This talk of gravitational pull and mass/weight applies to the market as well. Pull up any historical price data and you’ll see that stocks on the rise will usually be unable to sustain its momentum and eventually be in decline. Here are two examples: Dow Jones over the last 10 years. Berkshire Hathaway over the last 5 years. Some of you may argue that the last few years have been trying for any company, let alone an Index. But one thing is for sure, everything that goes up has to come down, every crest is followed by a trough, and every trough will not stay down forever. What does matter though, ......
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By EquityWatch
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