Thanks for the great post Prosperity PeteI found this on Stockscores which I think complements your post. Cheers.
"Now, what about upward trends? Optimism and greed have a cycle too. We tend to doubt good things at first despite evidence to the contrary. People want to see proof before they open themselves up to good feelings. This is because we mostly want to avoid the pain of disappointment. It is not fun to get your hopes up and then have them crushed.
The result is that most people do not buy in to upward trends until they are well under way. We are full of doubt until the market offers us proof. However, by the time the proof shows up, it is usually too late. These investors end up paying a premium because they got in to the trend too late.
The lesson is to not approach the market with a fear of pain. Do not be reckless, but if things are starting to look good, take advantage with the knowledge that the pain you will feel early in a trend that fails is much less than the pain you feel if a well established trend fails. The higher stocks rise, the harder they fall.
Do you want to beat the market? Stop worrying about what companies are doing and start focusing on what people think about what they are doing. Take some basic knowledge of human psychology and try to figure out the emotional cycle from the stock chart. This process is much more effective than studying balance sheets and income statements. After all, stock prices will only go because people are willing to pay more."