given time is the price at which the number of buyers equals the number of
sellers. Half of the investors trading your “hot stock” are trying to get rid of it.
Or maybe you know something that the sellers don’t. Perhaps all the people
unloading XYZ Corp. missed the
Wall Street Journal article about XYZ’s new
blockbuster drug for male-pattern baldness. Okay, that might happen. But where
are the world’s other sophisticated buyers? This stock is a sure thing at $45, yet
for some reason Warren Buffett, the traders at Goldman Sachs, and the top
Fidelity portfolio managers are not snapping it up. (If they were, the stock would
be bid up to a much higher price, just like the Lincoln Park brownstone.) Do you
know something that no one else on Wall Street knows (bearing in mind that
trading on any information not available to the public is against the law)?
Or maybe someone on Wall Street is pitching you this stock idea. America’s
brokerage houses employ a cadre of analysts who spend their days kicking the
tires of corporate America. Is all that information wrong? No—though there are
plenty of cases of incompetence and conflict of interest. Analysts provide all
kinds of legitimate information, just like your real estate agent. When you are
shopping for a home, your agent can tell you about neighborhoods, schools,
taxes, crime—the kinds of things that matter. Wall Street analysts do the same
things for companies; they report on management, future products, the industry,
the competition. But that does nothing to guarantee that you are going to earn an
above-average return on the stock.
Dostları ilə paylaş: