For anyone scared of the recent price drop, and thinking about getting in or out:
1. If you are in this stock, imagine if you were out of it. Would you buy back in at these new low prices? Would you be scared of buying low? Now, consider that the decision wether to sell or buy are the same decisions. If it's a stock you wouldn't buy, then sell. If it's a stock you wouldn't sell, then buy.
2. What REAL bad thing has happened to the company lately? The most tangible bad thing is that WSJ put out a bad report on it. Do immaterial reports last? If the report does not in any specific way target the products, or the marketing, or company policy, then it is a day trader's phenomenon. We missed the opportunity to sell high, you didn't see this thing coming, but it IS TEMPORARY. Zip drives will NOT suddenly become unpopular. Acer will NOT withdraw their deal.
3. Why is the stock going down? Because the stock went down. That is, it is going down because of a spark started by WSJ. People were feeling wealthy, and saw an eminant risk. Notice that poor people do not see these eminant risks. Maybe they have less to lose? Or more to gain? THE DECISION IS THE SAME. If you think it is not, then your emotions are in the way of your decisions.
Also, if you think that the decisions to buy or sell are not the same, then your emotions are also ruling you. Emotions are intuition. While intuition should be followed, it must first be challenged. |
