newbies buy garbage... period

strength/weakness has 2 dimensions - 

1) sector dimension - how does stock compare to sector and overall market... here you have to BUY STRONG !  too many people here make the mistake of buying 'cheap' shit, which is just throwing good money after bad and will sit underwater for long time.

2) time dimension - how the overall market ebb and flow.... here you want to BUY CHEAP (meaning add chips in the pot when there is temporary weakness in a bull market) if possible, but sometimes you have to double the bet if the momentum is strong.

newbies, due to popular psychology, usually get these 2 dimensions backwards... they would see the market going very strong on the time dimension and regret not buying during retracement and get greedy because everybody else is making money, then they will compound the timing mistake by picking the garbage stock, the worst choice in the sector dimemsion..... well, to newbies it all makes sense.... because SPY has run un 20% and is now 'too expensive', let me buy garbage XYZ because it hasn't move up at all and is still 'cheap'.

for one's own wallet sake, please understand these two dimensions.

所有跟帖： 

• Individual stock and index are 2 different animals, I am afraid. -一天釣魚，兩天上網- ♂ (49 bytes) () 12/07/2012 postreply 07:13:22

• if you buy index -noconfusion- ♂ (166 bytes) () 12/07/2012 postreply 07:47:18

• Index could be sector-index, too. -一天釣魚，兩天上網- ♂ (53 bytes) () 12/07/2012 postreply 09:48:48

• very nice... -jy101- ♂ (0 bytes) () 12/07/2012 postreply 08:00:51

• this also serves as an argument for index DCA -noconfusion- ♂ (298 bytes) () 12/07/2012 postreply 09:51:32

• this also serves as an argument for index DCA -noconfusion- ♂ (298 bytes) () 12/07/2012 postreply 09:51:42

• this also serves as an argument for index DCA -noconfusion- ♂ (298 bytes) () 12/07/2012 postreply 09:51:51