InvestorQ : How should professional investors / traders react to hope and hype?
Abhi Yadav made post

How should professional investors / traders react to hope and hype?

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Abhi Yadav answered.
3 years ago
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As the old saying goes in the market, “Hope is when the investor gets excited and the rookie is disinterested; hysteria is when the rookie gets excited and the investor loses interest”. A smart investor is one who plays each phase long enough to ride the wave and quick enough not to get caught on the wrong side. Once you are able to identify which phase the stock is in, the rest of the job becomes fairly simple. The next time you identify a stock, try to find out which segment it will fit into. Is it a case of hope, hype or hysteria? That could be your starting point in your investment decision. As they say, something well begun is as good as half done.

As Jesse Livermore famously said, “There are times money can be made by holding on; times when money can be made by jumping in and times when money can be made by jumping out”. Identifying a good stock is just part of the story. Bracketing them in the right stage and playing accordingly is the bigger challenge. The day you can do that, it is your first step to smart investing. The lines of distinction between hope, hype and hysteria are quite thin. The day you can actually do that, you have surely arrived as an investor.

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