Pretty much, we base it on historical data analytics (which doesn't work often) and analysis of public information, I say public in terms of the fact that we are supposed to use information that everyone can access.  Insider information is sometimes used but it is usually illegal to do so.

In some cases we can sometimes abuse the expectations of traders to make money, during a recession for instance we tend to buy since investor confidence is somewhat low, and in times of boom we either sell or even short sell.