Things look decidedly normal and bullish. The tech-heavy Nasdaq Composite gained the most - up +4.61%...
While the Small-Cap proxy S&P 600 came in second by advancing +4.67%.
The mega-cap tickers brought up the rear, with the Dow Jones gaining "just" +3.24%.
Best of all, the U.S. economy created 4.8 million jobs in the month of June. That crushed the expected number, 2.9 million, by 65.5%.
The unemployment rate, which was expected to clock in at 12.4% instead came in at 11.1% -- 10% lower.
We still have to see how the coronavirus is going to affect the re-opening economy. But so far things are looking very good indeed.
Now...
In a free market (emphasis on "free") many buyers and many sellers meet to bargain, argue and persuade. Or, in the words of the immortal Adam Smith, to "truck, barter, and exchange".
From out of that roiling hubbub emerges a vital piece of information -- the PRICE of something.
There's nothing trivial about a freely-set price -- of anything. In fact, price is the cornerstone of the "True Market" approach to investing.
And price is the starting point of every trade idea you'll ever hear about in these pages.
The reason is simple -- every single price holds within itself a nearly infinite amount of information.
Every price you encounter displays in the shortest way possible the boiled-down opinions, desires, calculations and capabilities of thousands or millions of would-be buyers and sellers at a particular moment and time.
Also, that price expresses millions of facts about the "state of the art" in fields as dissimilar as technology, manufacturing, business management and marketing.
In other words, a price distills real facts about what it takes and what it costs to produce or "bring to market" whatever is being offered.
A functioning market really is a miracle, and a deeply democratic one at that.
In the marketplace, the only color that matters is green, and no-one is ever told "your money's no good here."
Always remember that the price of every item on the shelf has a shelf life of its own.
As opinions and desires and technology change... prices change too, sometimes quickly. You've probably seen for yourself how rapidly an underpriced stock moves back up or an overpriced one drops down.
At the heart of this self-adjusting miracle is a phenomenon called "the wisdom of crowds".
In a nutshell, it means that in any sufficiently large group, the average assessment of the entire group is almost always closer to the truth than any single assessment no matter how expert.
The classic demonstration of crowd wisdom is of course the "guess the number of jellybeans" contest.
If 300 people at a carnival are asked to guess how many beans are in a giant jar... the mean, or average, of all 300 guesses will come closer to the actual number that any individual guess.
And there's a bonus. The larger the group/market... the closer to the truth that average number will be.
In other words, markets are smarter than individuals because they're basically gigantic brains. And the more "cells" (people) in that brain, the better.
Like I said, very democratic.
Those market-brains perform just as well when it comes to "guessing" what a particular stock or ETF is worth.
At True Market Insider (as you know) we never try to "predict" where the market is headed. For one thing, to predict something like that you'd spend your days bogged down in a million details about every facet of a company, industry, sector, CEO, country, etc.
We have better things to do than pose as walking encyclopedias of financial and social information.
Instead, we recognize that millions of market players have already thought long and hard about everything there is to think about when it comes to sizing up a stock.
And those countless players have "encoded" ALL of their findings and opinions and hunches in one single number -- the price of the stock RIGHT NOW.
If you find that your mind sort of rejects this idea -- that everything everyone thinks or feels about a stock can be reflected solely in its price -- well, you're not alone.
I've had heated arguments with millionaires who consider that particular idea to be (in their words) "bulls**t".
Doubters are entitled to their opinion, just as they're entitled to their anemic returns.
You and I are entitled to our opinion as well.
And we have something the doubters lack -- hundreds of studies showing that our investing approach works better than any other.
In other words, if you simply let price tell you what the market's "brain" has decided...
You'll make better buying and selling decisions than if you tried figuring out where this or that stock or sector "should be" headed.
Much better to ask "where IS the market (or this sector or stock) right now?" and then let momentum -- the fact that "something in motion tends to stay in motion" -- guide your decisions.
In coming weeks I'll show you some of the results of those studies I just mentioned. I promise you will be amazed.
I also promise that you DO NOT want to miss this presentaion by Chris Rowe -- where he shows off his #1 trading technique.
(It's a way to turn $930 into $15,866 by "checking" your positions just once a month.)
Until then, enjoy the holiday!
And have an amazing week!
Bill Spencer
True Market Insiders
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