Its the mentality that when a stock goes down, buy because it is at a better price and sell when the price starts to go up. This is why most individual investors lose. A stock doesn't go down just to create buying opportunities, but individuals ignore those signals. Going down is a bad sign. When the stock goes up individuals start selling, they miss out on most of the increase. Individuals always think they can outsmart the market. Institutional investors go with the market that's why they win.
Another mentality that I don't understand is, for example, you think FAMH will hit $2.00/share, it is currently at $.39 on the ask. What do you do, you put in an order to buy at $.35, you just have to buy lower than anyone else, you have to squeeze a few more shares out. The reality is you are willing to lose an investment that you think will go up 5 fold because you want to buy it $.04 cheaper than the current offer. Also FAMH has to go down (bad) before it goes up (good). If you were right that it went to $2.00 without dipping $.04 for you to get in, you just screwed yourself. Institutional investors don't squabble over pennies, quarters, or halves, that is why they win. |
