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What makes it work?

WHAT makes the stock market go up and down? Nobody knows, beforehand. But afterward, that's when everybody knows! This allows people to make millions of dollars explaining what happened and why.

It is exactly like those highway ''deer crossing'' signs. No one knows where a deer is going to cross the road beforehand, but after some wandering official sees one go loping across, he puts up a sign. Of course, no deer may ever cross at that point again, but that isn't the point. It is good for the sign business.

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One of the things for which people blame the fluctuation of the stock market, after it fluctuates, is rumor. The favorite rumors are about Ronald Reagan. Not many firm facts come out of the White House. Rumors, however, come out of the woodwork. Rumors are what keep people from turning off the television. They are what make people listen when E.F. Hutton talks.

Rumors about Ronald Reagan's health, his intentions, or whether he holds hands with Nancy while watching his old movies are all under suspicion these days, because a lot of street-smart investors believe false rumors are continually planted in the news to affect the stock market. Who plants them? - that's the question. Some say it is people with big portfolios. You see a lot of those walking in and out of banks and investment houses.

False rumors could also launch nuclear missiles. But which is worse, a bad stock market loss, or losing Detroit?

One important factor affecting the stock market is America's $200 billion debt. So maybe the $200 billion debt is only one of those false rumors coming out of Washington. Maybe the United States is in great shape and one of those big portfolios wants to buy some cheap stock.

Another rumor that could affect the stock market is that the Soviet Union hopes Ronald Reagan will lose and Fritz Mondale will become president. Is it possible that Soviet party boss Konstantin Chernenko wants a big chunk of Ford Motor Company stock and he's trying to knock the bottom out of the market?

Who could ever think such a thing?

Maybe we are starting a new rumor.

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