The secret of stock market prediction therefore is correctly to read when the one is going to take over from the other

The secret of stock market prediction, therefore, is correctly to read when the one is going to take over from the other. But primarily it is the psychological factors of fear and greed that drive stock markets They always have done, and always will do. Floated in 1994 at 45p, it joined AIM in September last year.The Scottish-based company buys defective chips, repairs them and creates refurbished boards for computer manufacturers. It had initially estimated the value of the market by 2000 to be pounds 20bn, but that is sure to drop.Memory also suffered production delays that affected results in 1995 That year, the company posted a loss of pounds 1.95m.. The world changes and markets change alongside it but the forces that guide and mould them do not Economic fundamentals are only part of the story here They both affect markets and are affected by them.

Prices for chips have dropped by 60 per cent since then.Memory Corp was relentless promoted as a one of AIM's clear success stories: a high-tech stock with a clear market niche. From a high of 555p last September, the shares plunged to 135p at one point yesterday, recovering modestly to close at 142p, down 13p on the day. The drop follows a single-week rout of 215p last week, as the shares appeared to be in free-fall. The drop has infuriated investors who subscribed to a placement of 1.2 million shares at 420p last autumn, just before a computer-chip price war was launched by US giant Intel. Shares in Memory Corp, the AIM-listed microchip repairer, continued their slide yesterday, on investor fears of a sharp decline in profits, writes Mathew Horsman. Despite the fall, Laporte is recommending an unchanged final dividend of 14.5p, to make a total for the year of 23p, up 2.7 per cent..

Its shares fell 189p on the day of the announcement to a low for 1995 of 613p, although they have since recovered to 683p, down 7p yesterday.Before the exceptional charge, earnings per share fell 10 per cent to 41.5p from 46.1p, while including it the decline was a more dramatic 91 per cent to 4.3p. Full benefits of the restructuring are not expected before next year.Like many of its peers, Laporte was hit in 1995 by violent swings in the price of its raw materials.The confirmation of last year's warning closes a difficult period for Laporte, which saw its reputation dented by the unexpected trading statement. "A detailed strategic review has been concluded which confirms our confidence in the future. A vigorous action plan to rationalise and refocus the group and to reduce costs is now well under way" he said.Nine of the company's 100 sites or offices will be closed as a result of the rationalisation, with about 300 employees losing their jobs. The market had expected an improved out-turn.As foreshadowed, pre-tax profits emerged at pounds 113.2m before the exceptional charge, down 8 per cent from 1994's pounds 123.5m. The fall occurred despite an 11 per cent jump in sales to pounds 1.08bn, underlying the squeeze in margins afflicting the second half of the year.Mr Leng confirmed the group's restructuring, which within weeks of his arrival had seen the departure of its former chief executive and finance director. After an pounds 88.7m exceptional charge to cover the cost of a wide-ranging strategic review, earnings per share collapsed more than 90 per cent.The new chief executive, Jim Leng, said: "It goes without saying that 1995 was a challenging year for Laporte and disappointing, particularly in the second half."Mr Leng, whose arrival from the Dundee-based packaging group Low & Bonar last autumn was greeted with a fanfare of high expectation, shocked investors just weeks after his arrival by warning that profits for the year would be below 1994's result.

Fairey is paying a final dividend of 5.45p (4.75p), making a total of 8p (7p) for the year, an increase of 14 per cent.. TOM STEVENSON City Editor Laporte, Britain's second-largest chemicals company, yesterday confirmed the City's worst expectations following last December's profits warning. Sir Robin said: "The combination of organic growth and development by acquisition has again enabled Fairey to move forward in a very positive way. These figures reflect an improvement in all business sectors."Earnings were up 20 per cent to 27.4p. More than 50 per cent of that growth came from the acquisition of Measuring Systems and of Loma, a private detection equipment company bought last year for pounds 18.5m.

Both Measuring Systems and Loma were performing in line with expectations, Sir Robin said.Adjusting for acquisitions and movements in advances, underlying cash generation was pounds 8.4m. RUSSELL HOTTEN Fairey Group, the specialist electronics and engineering company, remained bullish about its prospects in 1996 despite warning yesterday that the general economic environment was getting worse. The company, which reported pre-tax profits up 33 per cent, said it would be protected against any economic slowdown by its expansion in Asian and American markets.In January Fairey, chaired by BICC's Sir Robin Biggam, paid pounds 50m for Particle Measuring Systems, a US high-tech company that makes instruments for the microchip industry to detect contamination.Pre-tax profits in the year to 31 December rose from pounds 25.8m to pounds 34.2m, on sales up 35 per cent to pounds 196.3m, bang in line with City expectations. Not actually inside the reconstructed playhouse, due to open in August, but in an adjacent half-timbered "olde" style building yet to be built. They could liven up proceedings by requiring corporate delegates to wear doublet and hose and so on. And all the Shakespearian tales of back-stabbing and betrayal should go down well Hey nonny..