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  01.03.2006 16:26

  AloV

  Market View Requires a Time Frame

  By Rev Shark
  RealMoney.com Contributor
   
  "A difference of opinion is what makes horse racing and missionaries."

  --Will Rogers

  Many differences of opinions about the future course of the stock market aren't really disagreements at all; they are simply investors operating with different time frames. Some of the most vocal bears are short-term bulls, and many optimistic bulls are longer-term bears. One of the major weaknesses of the vast majority of financial discussions is the lack of clarity about the time frames being discussed. If someone states he is positive or negative about the market for this or that reason -- but fails to discuss the time frame he is looking at -- we tend to impose our own time frame.

  If I say I'm bullish but fail to mention that my time frame is a week or two, then investors will tend to consider my position in terms of their own time frame. Those with a time frame of a day or two might find my logic and arguments lacking when clearly we had a an ugly day of selling yesterday. (Although those with a longer time frame may find me foolish because I don't seem to care about major macro economic issues.)

  All discussions about the stock market need to be clear about time frame; success in the market is highly dependent on timing. Having a well thought-out, logical long-term bearish thesis about the market is nice but it isn't going to make you any money if your timing is poor. Lots of market pundits were correct about the market crash that occurred in 2000 but many of them had been bears much too early and not only missed out on some of the biggest gains in a generation, but didn't break even for many years.