Chuzzlewit:
I have a simpler if less analytical idea of volatility.
If you invest in a perfectly marvelous stock that does well and goes up in value each quarter and there is nothing at all negative about the company, then some analyst, in order to make you worry and sell it will say "Boy, If I owned that dog I would be really worried,
its got this exceedingly high BETA and its gone up so high that if it tanks from its presently OVERVALUED position it will really go down fast"
Me: "OH, wow, man, wow, I just knew there was something wrong here, life cannot be so easy, investing is supposed to be such a difficult thing to understand and make money at and all the insiders and news people know so much more about investing and all that maybe
I better sell it now while it is up or I will lose everything what do you recommend "
Broker: " Well, I strongly recommend government bonds, thats where the really smart old rich people keep their money. Safe as sin, and for each $1000 you invest you get $56 a year, so at the end of the year you will have $1056 and never lose a nickel. Thats over $4
return EACH AND EVERY MONTH for the next 30 years. Guaranteed. No more and no less.And they have a real low VOLATILITY.
Me " How many times a year do they split them there bonds anyway"????
Sig
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