In studying, understanding, and interpreting market action, we consider all market action as a manufactured operation in which the buying and/or selling is sufficiently centered and coming from interests better informed than the generally untrained individual investor/speculator. The many large interests which do have an effect on the market place (trust companies, banks, mutual funds, investment trusts, investment companies, hedge funds, specialists, position brokers, etc.) are best thought of as the Composite Man.
This Composite Man causes the market to act and react. Or, what actually happens is the market responds to the ageless, natural law of supply and demand. The Composite Man and the effects of the law of supply and demand are really synonymous. It is the result of the motives, objectives, hopes, and fears of all the buyers and sellers whose actions produce the net effect upon the market. Other terms which may be thought to be synonymous with the Composite Man would be “the market,” “the sponsor,” “the operator,” or “they.” These terms are used interchangeably. . . . The selection of the terms is determined by what is most meaningful to the student. It should be your objective to think of the Composite Man as the primary force in the market place. Thinking of him in this light should enhance your analysis of the action resulting from the dominant groups operating within individual stocks and their total effect within the general market place.2
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