Investing is an incredibly emotionalised game.
Even with all the computers, tech and spreadsheets – emotions, particularly those of collective ‘crowds’ dominate and influence prices.
Yes, in the long run, rational pricing of stocks wins out. But in the meantime, short term, emotionalism often sets prices.
And the more extreme the situation, the more you’ll find short term emotionalism influencing prices.
The best time to buy is when pessimism is at its maximum and sell when optimism is at its maximum.
You could say - buy at the point of maximum pessimism and selling euphoria.
Where the market has been absolutely smashed and sentiment is toxic. No-one wants to touch that sector.
That’s usually where the best opportunities lie.By the same token, whenever people start to paint a wonderful, exciting story on an investment idea, that’s usually what I’m starting to come out of.
So, you could say I’m a buyer of misery and the seller of optimism
Even with all the computers, tech and spreadsheets – emotions, particularly those of collective ‘crowds’ dominate and influence prices.
Yes, in the long run, rational pricing of stocks wins out. But in the meantime, short term, emotionalism often sets prices.
And the more extreme the situation, the more you’ll find short term emotionalism influencing prices.
The best time to buy is when pessimism is at its maximum and sell when optimism is at its maximum.
You could say - buy at the point of maximum pessimism and selling euphoria.
Where the market has been absolutely smashed and sentiment is toxic. No-one wants to touch that sector.
That’s usually where the best opportunities lie.By the same token, whenever people start to paint a wonderful, exciting story on an investment idea, that’s usually what I’m starting to come out of.
So, you could say I’m a buyer of misery and the seller of optimism
Comments
Post a Comment