Do We Look At Stocks The Right Way?

Probably since the day the markets opened people have been talking about them being either "overbought" or "undersold". In reality only one of those terms makes any sense at all and that term is oversold. While it is possible it is unlikely since the only consideration that a market would really be oversold in is when the cost of a share is zero. That is oversold! That can be contrasted when we consider the term overbought, because in reality the sky is the limit for how high any given stock could potentially rise. So this case can never really occur. So there is no such thing as overbought at all. A lot of types of investing programs try to tell you the opposite.

I suppose people mean some kind of relative term when they speak in this way. When they say "overbought" they really just mean that the market is higher than before, and they think it won't go any higher. "Oversold" would translate to mean it is lower than it was before. That is the reasoning why I find the need to insist that I and others why agree to start using a more appropriate termonology. It really actually makes me quite excited to talk about. A revolutionary new concept. My new terms (and feel free to use them widely to get the buzz going) are "Underbought" and "Undersold". They get tossed around a fair bit places like eminiforecaster.

What is it to be "Underbought"? Quite simply, it is when the market has not raised enough to be where it will be in the future. This means "undersold" occurs when the market has not declined enough to be where it will be at in the future. So these important key terms carry a whole different kind of meaning to their (rather meaningless) counterparts "overbought" and "oversold".

My goal is to move people away from looking back at the past to display where markets will go in the future. Let the past be in the past and let's look at the future when considering things like this. In my experience the best traders are the ones that look at the value of a company now, and where it will be in the future as opposed to lamenting the past. They look for where the trend of the market is heading. They are anticipatory investors.