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Today at a Glance:
Lesson From the Book: Psychology of retail Investor in Crash/Bear-Market
Tweet: How to value Newly listed Loss-making Companies
Quote from Charlie Munger
Snippets: How to make large Money and Retail Investor story with IPO
Learning from Learn to Earn Book By Peter Lynch
Image Source: Lehner Invesments
Psychology of retail Investor in Crash/Bear-Market
Investors begin to worry that stock prices will hurtle toward zero and their investment will be wiped out. They decide to rescue what’s left of their money by putting their stocks up for sale, even at a loss. They tell themselves that getting something back is better than getting nothing back. It’s at this point that large crowds of people suddenly become short-term investors,
They forget the reason they bought stocks in the first place— to own shares in good companies. They go into a panic because stock prices are low, and instead of waiting for the prices to come back, they sell at these low prices. Nobody forces them to do this, but they volunteer to lose money. Without realizing it, they’ve fallen into the trap of trying to time the market.
But anybody who sells stocks because the market is up or down is a market timer for sure. A market timer tries to predict the short-term zigs and zags at stock prices, hoping to get out with a quick profit. Few people can make money at this, and nobody has come up with a foolproof method. In fact, if anybody had figured out how to consistently predict the market, his name (or her name) would already appear at the top of the list of richest people in the world, ahead of Warren Buffett and Bill Gates. Try to time the market and you invariably find yourself getting out of stocks at the moment they’ve hit bottom and are turning back up
One Tweet
One Quote
My system in life is to figure out what's really stupid and then avoid it. It doesn't make me popular, but it prevents a lot of trouble.
- Charlie Munger
Interesting Books Snippets shared during the Week
1. Story of Retail Investor and Hot IPO (Source Book)
2. Scuttlebutt 101 (Souce Book)
3. Large amounts of money aren't made by buying what everybody likes. They're made by buying what everybody Underestimates. (Source Book)