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Definitions

- Boards of Directors. A hold over from class societies. Although there are exceptions, do not believe that directors are watching out for shareholder interests. Many people serve on boards for selfish purposes. Selfishness is okay as long as it is not coupled with dishonesty, deceit, stupidity, or laziness. And most board members have no understanding of the process they are supposedly overseeing. (Scroll down to see Cronyism).

- Bubble Markets. These are fun. Get in near the lows and sell near the highs. Buy put options or write call options during the down cycles and buy call options and write put options during the up cycles. Or simply buy low and sell high. The Indicant beats buy and hold. That is its purpose. A 30-year old investor in October 1929 was over 65 years old before his late 1929 investments were back to break-even and six foot under when discounting for inflation.

- Bull/Bear Signals-All models. Click link for a Mid-term cyclical view.

- Bullish Spurts-This is a bullish rally that can either be the early stages of a real bull cycle or just a fake, emotionally based bullish cycle in the face of an underlying bear cycle. Clicking the words, bullish spurt, will show you an example.

- Charts, Understanding Indicant Charts. Key attributes are Force Vectors, Vector Pressure, Indicant Line, Red Bulls, Yellow Bears, Short-term Cycles, Bullish and Bearish Domains, Bull/By Signals, and Bear/Sell Signals.

- Convergence. This is when different sectors or indexes are all moving in the same direction and with similar magnitude. During convergent bulls, everyone makes paper money. There is no such thing as convergent bears. There is always a bullish sector, stock, or fund. (Opposite of divergence). 

- Commonality Phenomenon. Any investment advisory successfully marketed to the masses will ultimately fail. Why? Because too many people will be doing the same thing at the same time. Even though bulls require participation from the crowd, the crowd is always wrong. The "crowd" consists of followers. The winners typically do the opposite of the crowd. Capitalistic methods require winners and losers. That is the nature of that system and there is no better system, as capitalism is closely aligned with the laws of nature. Another way to understand this is to plot a single series of random numbers on graph paper. It looks like cardiac arrests. Take a second set of random numbers and add them to the first set. A plot of the two set of numbers will not be as volatile. A third set of random numbers added to the first two sets will produce a flatter line. If you keep doing this, you will ultimately find a straight line. The Indicant has limited membership. We don't want our members paralleling the behavior of the "crowd." We defeat the crowd. That is the way the system works. Why should be editor and staff of the Indicant be loyal to the masses? We are only loyal to our members, who have expressed confidence in our models.

- Commonality Threshold. The market always starts its decline just as nearly every potential investor is finally "into" the market. The market always starts its bullish incline when very few potential investors are into the market. These cycles last from three to five years, but with occasionally significant variations . More than one-half of all stock market participants lose money because of the nature of their participation. This is why the market consistently demonstrates bull and bear cycles.

- Cronyism. Many generations of management teams in older corporations increase the likelihood of practicing cronyism. It is okay if the cronies are competent, but all too often, they are not. It is interesting to note that General Motors Board of Directors recognized this in the early 1990's and dumped most of their parts manufacturing operations to the public and fired most of the "good o'l boy network." The company has benefited since then. This is obviously an exception to bad boards. Unfortunately, GM started its death spiral shortly after the retirement of its great leader, Alfred P. Sloan. The death spiral continues and it will be immoral and weaken the great U.S. economy if the government intervenes in saving General Motors. Enron was not an exception. It had a board consisting of the all four components of failure; deceit, dishonesty, laziness, and stupidity. (See Board of Directors).

- Decisions. They are simple and only four to remember. Buy, Hold, Sell, Avoid. The Indicant advises of these four decisions every weekend for the Mid-term Indicant and daily for the Quick-term and Short-term Indicant models.

- Dilettante Management. Managers who lead what they never did. A person wearing cowboy hat and boots all the time, who never rode a horse, bull, or roped a calf.

- Direction of Stocks, Funds, and Markets. Who cares about magnitude? The direction is all that is important. If it is going up, you want to participate. Estimates of 10%, 20%, or even 50% bulls are wasted energy. Who cares how much! Up or down is the only salient point here. The Indicant identifies direction. (See Magnitude)

- Divergence. This is when some sectors are more bullish than others or when some sectors are bullish and others are bearish. (Opposite of convergence).

- Economic Wealth. Wealth is delivered by three and only three value streams. 1) Manufacturing. 2) Agriculture, 3) Extraction. All other forms of economic existence live off these three.

- Fluttering. Hourly or daily stock market vacillations with wild bullish or bearish swings. This emotionally based phenomenon suggests simultaneous strong bullish and bearish sentiment. The market, though, always finds a settling trend or sustainable cycle of directional intensity.

- Forecast. A specific numerical forecast will have error over 99% of the time. And the further into the future the forecast is, the more error it has. This is not an opinion, but a statement of fact.

- Magnitude. This is how much the market, stock, or fund goes up or down. It is impossible to consistently predict magnitude. Just focus on direction. (See Direction of Stocks, Funds, and Markets).

- Market Classifications. The Indicant advises of bull or bear. It has four unique ways of doing this. (See FAQ's).

- MBS (Management by Stupidity). Many companies are led by incompetent management teams. Over half of mutual funds fail. A successful company can be ruined rapidly with management stupidity. Fortune500 membership life cycles are getting shorter. That is because of the high influx of dilettante managers who are employed during the cycle of successful enjoyment, as opposed to those who build from scratch. Excessive focus on academic credentialism and cronyism accelerate the demise of Fortune500 companies.

- Indicant Models. 1) The Short-term Indicant tracks the market every day. If you want hourly or real time tracking, go elsewhere. We want our members to also have a life and not lose money. 2) The Short-term Indicant consists of two models; the Near-term and Quick-term, which are described in the same charting data and report card performance updates. The near-term cycle reacts more swiftly to changing stock market conditions. Click here to see Indicant historical performance. 3) The Mid-term Indicant is a weekly update for stocks, funds, and markets. 4) The Long-term Indicant is updated monthly to quarterly depending on conditions..

- OPM Disease - Most are employed in positions that use other people's money. Politicians do this for a living and have, for the most part, demonstrated an ability to elevate misery in systems without constraints. Large corporations do the same, but there are some constraints until dilettantes dominant the policies. Once that happens, the organization expires.

- Option Stalking. Most day traders and other investing radicals lose money. That is because they chase a moving target. A shot-gun could work for them, but unfortunately, the target requires a bullet and most cannot hit the target. Stalking an option is analogized to successful carnivores in the wild. They stalk first and then pounce. See the Quick-term Indicant guide for more details on options opportunities and click here for options stalking.

- Politician's Influence on Stock Market. Their only influence can be negative. It is impossible for them to provide a positive (bullish) influence. Why? Henry Ford, Thomas Edison, Soichira Honda, Alfred P. Sloan, Earle P. Halliburton and thousands of others built the world economy. Politicians did not build the economy. Anyone who does not live within a budget and whose performance is not tied that budget will not perform well. Anyone who does not compete on a daily basis will not perform well. Politicians only method of competing is negatively talking down their opponent or claiming they a better than others, including you.

- Spurt Behavior - Short bullish or bearish cycles that are contrarian to the underlying long cycle or trend. Their approximate duration ranges from two to eight weeks. Some refer to these short cycles as "sucker rallies." The Near-term Indicant formerly identifies these spurts and signals bull/bear or buy/sell depending on their underlying directional intensity.

- Sector Investing. There is always some sector diverging bullishly or bearishly from the rest of the market. The Indicant stocks and funds cross several sectors. (See Convergence and Divergence)

- Selfishness. This is good. It, along with greed, is what causes the stock market to not stay flat for long periods of time. The greater the market volatility, the better the Indicant performs.

- Stalking Options. Scroll up to Option Stalking. Click here for tour.

- Stock Value. Although many analysts and brokerage houses convey what a stock ought to be worth, their hot air is always superseded by the reality of the actual stock price.

- Trust. You cannot trust security analysts, investment bankers, public accounting firms, several company management teams, many fund managers, boards of directors, and nearly all politicians. Who then can you trust? Look in the mirror. The Indicant will be happy to help, but only a few of you.

- Voodoo Bookkeeping. The 1990's NASDAQ bubble produced pressure on non NASDAQ companies to heighten the performance of their stock prices. So, rather than working harder and smarter, some companies chose to insert bogus numbers into their financial reports. Never pay for fictional literature, as fiction should be free. Simple bookkeeping should be re-employed for the sake of the equity markets.

 

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