1.
Buy Low, Sell High.
This
stereotypical myth is probably the most dangerous, even worse then “buy high,
sell higher”
And
here is why:
If the stock is in the 52 weeks “low”… it’s there for a reason! Things are going bad. The reasons range from lost contracts to lawsuits. Believer in this myth looks at the company’s FORMER charts and sees how “high” it was and how “low” it is now. He believes that “going up again” is only a matter of time. He sees this on EVERY company’s charts on the market. He checks hundreds of them. Sure… they all go up and down. What can go WRONG??? What is the chance that HIS company will not get up and go broke??? What kind of “bad luck” would it take???
What he doesn’t notice is the fact that the companies that DO go BROKE, DON’T PUBLISH THEIR CHARTS!!! He only views the ones that DID SURVIVE!
2. Buy High, Sell Higher.
How do you know that the company’s stock price is not inflated because of high expectations? How do you know if the company will not loose contract, have a lawsuit?
The price is usually already inflated. E.g Microsoft
trading at 120 dollars while paying 0.50 dollar in dividend! For 120 dollars
investment… T-Bills would give you 10 dollars return on 120 dollars investment.
Sure… Microsoft will “grow” over the years… but SO would your totally safe
investment in T-Bills… In fact one book’s financial gurus were saying that’s
the way to go because, “laws of physics” say that “the body put in motion will
remain in motion until stopped”. Hmmm I don’t know if I want to apply “laws of
PHYSICS” to stock market. Do you?
3. Mutual Funds Make “safe” investment.
Again,
the ones that loose money DON’T ADVERTIZE.
4.
Dow Jones is important
indication of the stock market.
Dow
Jones is an average from only 30 corporations that are as different as food and
steel. It is outdated and doesn’t represent today’s market consisting out of
THOUSANDS of corporations, mostly high tech and banking.
5.
Technical Analysis Makes
Sense.
It doesn’t. You can’t predict future prices based on charts of past prices from a year ago... It’s THAT simple.
WHAT DOES MAKE SENSE
A) Research “balance sheet” and “income statement”. You will be amazed to find out that companies that are in debt actually COST ANYTHING…
I believe that a company in debt is WORTHLESS. Oh, it may survive and be worth something??? Well, will talk THEN.
B) What is the company up to? Will launch new hot service? Good, you can bet the price will go up as the income will rise.
WHEN THE PRICE OF STOCK IS
FALLING AND THE PRICE CLOSES AT LOWEST (TODAY, BUT GREAT IF FROM YESTERDAY).
THAN LAST THEN THE PRICE OF STOCK MUST BE UNDERVALUED AT THE MOMENT OF CLOSURE
THIS DAY AND THE MOMENT OF OPENING NEXT DAY. SIMILAR REASONS AND BIGGER
MAGNITUDE FOR OPTIONS OF THAT STOCK. THAT'S BECAUSE FEAR RULES.
SIMILARLY WHEN THE STOCK
PRICE IS RISING THE GREED FACTOR WILL CAUSE REVERSE REACTION, BUT ONLY IF THE
CLOSING PRICE IS THE HIGHEST!!!
Banks abuse their
privilleges to distribute the produced wealth. It doesn't matter who owns the
banks now. We can discuss it later.
The wealth should
be distributed in the form of money to all who PRODUCE it. The Government
should attach monetary value to the produced wealth and distribute it to all
citizens who produce it in the form of money.
Interest was
prohibited in Israel under the penalty of death (i'm not sure). There was some
very important REASON to it, and that's enslaving of people by skimming the
real value off their work.
Power is best
demonstrated by achieving better success. Success is defined in "Net
worth", which is how wicked New World Order launched assault on human
race. You have to read one sentence. Comprehend. Read another sentence.
Comprehend. Otherwise you won't comprehend what I write.