"Art is anything that evokes emotion. All art, music, painting, sculpture, photography, etc., will evoke some kind of response or emotion from us," Mike Henry reminded. The layman may at first find the artist's work obscure because "if you value a painting because it resembles an object, you have missed the point and have reduced the painter to the status of a camera. An artist depicts the invisible with visible. All art is real in that it exists. And all art is abstract in that it refers to many aspects of experience. If a spectator only responds to art that imitates, he will have to ignore the great majority of art. He will also fail to appreciate the significant aspects of art; the expression of ideas, emotions and values which are the very life of art." 

Like art, "the stock market consists of people who buy and sell common stocks based on their personal levels of fear and greed. Thus it is an emotional universe in which participants compete in an attempt to build or preserve their capital," A.G. Edwards & Sons explained. "Our taste in art runs to paintings that capture the beauty of the West, its mountains, plains and skies, and the majesty of native Americans. We find this art very sensuous, moving, and simple to understand and feel. 

"Unfortunately, this is the opposite of the stock market, which reminds us of abstract paintings that we believe are more intellectual than emotional and often require the artist or a supposed expert to tell us what they mean. On a short-term basis, emotions control the direction of stocks. As market analysts, our primary job is to try as best we can to understand the emotional make-up of the stock market, its personality, and adjust our buying and selling accordingly. The longer term trend of the stock market is controlled by how folks perceive economic fundamentals such as the outlook for corporate earnings, inflation and interest rates. 

"The abstract or complex nature of the stock market is due to multiple fundamental factors that influence the trend of stocks and the dominant role that emotions play. However, there is one consistent theme that runs through the stock market and makes this abstract art somewhat understandable. What you cut through all the drips, spots and splotches on the stock market's canvas, you learn that the outlook for corporate earnings and how they are being evaluated gives meaning to the whole painting. 

"Our approach to investing is to attempt to understand the bigger fundamental picture and then focus maximum attention on the current emotional condition of the stock market. If one has a good handle on the long-term fundamentals, short term mistakes will be worked out." 

Michael Francis of the 'Milwaukee Journal Sentinel' told readers, "Investor sentiment historically has been a decent predictor of future market direction. A bearish investor sentiment outlook is considered positive news for the direction of the market. That's because when most people are selling, the most likely future direction of the market is up. On the flip side, a bullish investor sentiment reading is considered a negative indicator for the future market direction."

In the bull market, share prices climbed, hence investors would buy. In the bear market, share prices dropped, hence investors would sell.

Tom Saler added, "What never changes is the effect of human emotion on asset prices. Logic cannot explain why investors who chased gold at $730 an ounce in May would turn around and sell it for $560 an ounce a few weeks later. Fundamental business and economic conditions simply do not change by that much, that quickly. Emotions, however, are another matter. Fear and greed ultimately are what drive prices, especially at economic turning points." 

Market strategist Tony Dwyer reasoned, "When the market becomes emotional, it overshoots reality . . . Emotion caused the stocks to oversell." Investment broker Jean Noel insisted, "Whether you’ve been investing several years or just a few months, it's never out of style to create an investment plan that helps you look past the daily market grind and keeps you focused on the big picture."

Jianping Mei was a professor of finance at the Univerisity of New York Stern School of Business. He made the observation, "The world of art is about beauty and imagination, while the world of economics is about reason and number crunching. Our job was to bring the 2 together, to find rationality in the world of emotion and to discover order in the wild art market of van Gogh and Picasso."

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