In this blog i will be sharing about 12 most silliest and Dangerous things people say about stock prices which was mentioned in one of the famous bestselling stock market book By Mr. Peter lynch named as One Up On Wall Street.
1- IF ITS GONE DOWN THIS MUCH ALREADY , IT CAN’T GO MUCH LOWER.
Peter lynch said that most of the people say that if this stock is down this much it cant go much lower but according to Mr. Peter Lynch that is a silliest thing to say because there is no guarantee that if its gone down this much it will not go more lower.
2- YOU CAN ALWAYS TELL WHEN A STOCK HIT BOTTOM.
Bottom fishing is a popular investor pastime, but it’s usually the fisherman who gets hooked. Trying to catch the bottom on a falling stock is like trying a catch a falling knife. its normally a good idea to wait until the knife hits the ground and sticks, then vibrates for a while and settles down before you try to grab it. Grabbing a rapidly falling stock results in painful surprises, because inevitably you grab it in the wrong place.
3- IF ITS GONE THIS HIGH ALREADY , HOW CAN IT POSSIBLY GO HIGHER ?
This is also a myth is people’s minds that a stock has gone high already so it can’t go higher than that judging a stock on the basis of price is harmful for an investor if it has good future prospects and is trading at fair valuation then there is no reason to say this thing.
4- ITS ONLY 3$ A SHARE: WHAT CAN I LOSE?
This is also a biggest myth in most of the people mind that a stock which is so cheap can’t go much lower and you cant lose money in it but it is also a silliest things to say because a 3$ share can also go to 1$ or even less than that and an investor can lose all his savings in a penny stock.
5- EVENTUALLY THEY ALWAYS COME BACK
There is also a myth that if a stock has crashed it will always come back but this is not true because a stock has fallen for a reason maybe it went bankrupt or Company shut down the business so in this case there is no possibility that the stock will come back so never buy a stock on such statement that a falling stock will always recover.
6- IT’S ALWAYS DARKEST BEFORE DAWN
This is also a myth in people’s mind that things that have gotten a little bad can’t get any worse.
7- WHEN IT REBOUNDS TO 10$, I’LL SELL
Some people say that if it will come to a stated price in their mind they will sell but that’s not a right way to treat stocks nobody knows how low can stock can go if conditions get worse it foolish decision to stay with your investment by saying if its rebounds at 10$ i will sell never take decision on the basis of stock price always take decision on the financial position and future earnings of a company.
8- WHAT ME WORRY? CONSERVATIVE STOCKS DON’T FLUCTUATE MUCH
So people also have myth in there mind that conservative stocks dont fluctuate much but that’s not entirely true any stock can fluctuate either it is conservative or a new company.
9- IT’S TAKING TO LONG FOR ANYTHING TO EVER HAPPEN
Some people sell their stocks to early because the stock has not increased in its price but that’s not a good way to treat you investment if fundamentals are improving and earning are rising then definitely the stock is worth to wait.
10- LOOK AT ALL THE MONEY I’VE LOST: I DIDN’T BUY IT!
People often have a tendency to ignore stocks which are growing and keep their money in the bank account and later regret that i could have bought it and made money so avoid this thing invest regularly.
11- I MISSED THAT ONE I’LL CATCH THE NEXT ONE
Some people say that they missed a multibagger so they will catch the next one but that’s may not be necessarily true a company in booming Sector can do good but same company in the lousy sector may not.
12- THE STOCK GONE UP, SO I MUST BE RIGHT, OR….. THE STOCK GONE DOWN SO I MUST BE WRONG
Some people have the tendency to judge the stock from its short term fluctuations and they sell the shares in their portfolio if they go down and think they are wrong about that stock and hold on to stocks which gone up and think they are right in short run you can’t judge a stock if its gone up or down a bad company can also rise in short period and can give a investor serious losses and a good company can fall in short term but can become a multibagger in long term view.
Conclusion:
So following are the 12 Silliest and dangerous things people say about stock prices which was stated by Mr. Peter lynch in his book One up on wall street so learn from these Silliest things to avoid making a investment mistake in stock market in future.
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Check out for more from external sources:
https://economictimes.indiatimes.com/?from=mdr
Stay tuned for more Educational finance blogs and learnings from Great investors like Mr. peter lynch , Mr. warren buffet, Mr. Rakesh Jhunjhunwala, Mr. Vijay kedia etc. and many more.