Darrell,
Research shows that the biggest mistake a small investor can make is selling good stocks too early, not buying crappy stocks.
Maybe, but I guess the corollary mistake would be holding crappy stocks too long. That's what worries people when the stock price is down and uncertainty turns to doubt and fear. They don't know if this one that is down is a crappy stock or not. Multiply it by enough people and enough doubt and fear and you get the kind of self-reinforcing cycle you've seen in RSYS and many other quality companies: people get scared, sell, the price goes down, they get more scared, sell more, goes down more, etc. This changes the perception of the company and, as mass psychology works its way on the stock price, creates the kinds of unbelievable buying opportunities that come along from time to time. The real problem is that when the perception gets extremely negative it is hard to see through, and people can't tell the difference between crappy and opportunity.
Baird |
