By: DanielXX "Complexity is not a cause of confusion. It is a result of it." This is a saying by Anonymous, the best I could find and the best reflection of my views. In the wake of the subprime crisis that all unanimously agree has arisen from the quantitative complexities of derivatives like CDOs and CDO-squared that baffle CEOs from proper risk management, mesmerise institional funds into blindly buying, and confuse regulators into despairing acquiescence, I think many more people would start to appreciate the beauty of simplicity. Or was that last 55-word sentence a bit hard to swallow as well? The pinnacle of achieving simplicity will be the ability to reduce stock market behaviour and strategies to a series of equations that can be consistently applied to make money, but as I understand no academic has been able to achieve it yet (though nobody who's done it would really want to make it public). But in the absence of such a Unified Theory of the Global Stock Market, it'll be good to develop a few mental frameworks to facilitate one's assessment of the overall market and the various sectors and how they will develop in the foreseaable future: a sort of guide on the direction of change, since absolute valuation is obviously not viable. In short, develop a framework to integrate various fundamental developments and then translate them into a sector- and stock-picking strategy that will best ride on your simplified reading of the future. How To Make Money In Stocks Series How To Make Money In Stocks Part 1: Back to the Basics How To Make Money In Stocks Part 2: The Time Horizon Premium How To Make Money In Stocks Part 3: The Illiquidity Premium