Greed and Fear: These are the 2 factors that intrinsically dictate the market at any given time (barring any govt interference). Greed for more appreciation..more gains..., fear of losing. Optimism about a stock or industry doing really well...pessimism about a crash or correction.
Eventually in the great market rush, it turns out that not only financial analysis skills are required to read market trend BUT also highly impeccable are economic and sociological skills. Afterall the market lives on the laws of demand and supply...this on the other hand is determined by investor behaviour and sentiment, greed, fear, optimism and pessimism (which may or may not be based on a company's performance).
If sentiments can be accurately forecasted, then the great financial purist and his PE ratios and dividend yield calculation can indeed be mocked at least in the short term
