When the market enters the mania
phase, the public (which we believe is so-called Dumb Money) are afraid of
missing the last boat, and hurry to jump into the market. The share might
appreciate some, but not much, compared with when the Smart Money or big money
did the bottom fishing at very favorable prices.
The Dumb Money is not willing to take
a medium-level profit. Instead, they wish the market to go down. Then, they
have the opportunity to buy more shares. At this time, the market might already
have turned, and the Dumb Money has caught the falling knife. Then people lose money and complain about
being an ordinary investor who does not have inside information, or just isn’t
lucky. This is the typical mentality of
the retail investors.
Before we enter the stock market as
an individual investor, we need to understand that stock market trading is an
unfair game. The Smart Money knows what
Dumb Money is doing, takes advantage of it, and makes money because of this
knowledge. However, the Dumb Money is unaware of Smart Money’s moves. If you do
not rescue yourself, it will make this game even more unfair.
We often say 97% of individual
investors lose money in the stock market. We are not sure if this figure is
accurate, but we believe the majority of market participants (especially the
uninformed throng who do not do the required studying) fall into this
unfortunate category. Diligent examination, and studying market history and
trends must replace “hot news”, following “tips” of others, or just relying on
simple luck.
If you want to learn more about the
Smart Money and Dumb Money, you can read more here:
|
|
Thanks
for your visiting and reading.
Have a
great day!
|
No comments:
Post a Comment