We in the world of money management do not have the ability to forecast trends in the stock market, which are functions of a host of variables that are largely beyond the consistent ability of individuals to anticipate. But, what we as money managers can do, through careful analysis, is to make accurate judgments as to which companies are doing well versus those that are not. So, if one balanced long positions in stocks that were perceived to be relatively strong with short positions in stocks expected to act poorly, the market risk would be totally eliminated.
