Investing
Posted on | September 25, 2008 |
Rule by the emotional has always been the way of the stock market. Its movements are governed by two of the strongest human emotions: greed and fear. This means that in the short term a quiet rumor about declining sales or the hunch of a few on a new product can send the market in an illogical frenzy, for either good or ill for a company. On the bright side, there’s a chance this can make you rich.
Similarly, a government often reacts to highstrung emotion and not logic. This means that stock market corrections are generally the product of emotion and rarely logic.
It is often in the moments of mob mentality, that an attentive and bold investor can get the greatest price for stocks. When a company’s stock has a sudden plummet, people often lose their logic (a la greed and fear)and sell at lower prices for fear that the stock will become worthless.
It is at the point of large-scale economic stress, that a clever investor can make his/her fortune. JP Morgan formed US Steel during depression because of the bargain prices of the companies he purchased from people anxious to remove the liability of a failing company.
During a time of recession, such as this, take a look at the companies that have survived countless depressions of the past. There’s a good chance that their stock wil
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