“Since for all men the visibility of the future is zero beyond this instant, assumptions as to how long observed trends will continue must be based on probabilities which in turn have been derived from the past and hence may not apply to the future. This is a long-winded way of saying that all estimates of the future are to some degree subjective.
The business of the stock market is to cash in on the future now. Accordingly it is really not as important, short term, to know what sales and earnings are going to be five and ten years hence as to know what other investors are going to think they will be. In general the longer a trend continues the more people can be found willing to risk their savings on the proposition that it will continue longer still. As a practical matter then we probably should assume that old trends will persist longer than new trends simply because, whether they do or not, more investors will be inclined to assume that they will.”
-Thomas William Phelps, 100 to 1 in the stock market