Market Is A Pendulum

The stock market is dynamic and prices of shares fluctuate constantly. Thus is normal for any large and open market. It also constantly swings like pendulum between extreme optimism and pessimism.

Stock Market Is A Pendulum

Many lay investors, not groomed in value investing, and driven by uncontrolled emotions of greed and fear; enter the market when it is unjustifiably high. No wonder soon the market crashes. The same investors are now gripped with panic and sell the shares which they had bought at high valuations some time back sell at a steep loss, fearing further fall in prices.

 An intelligent investor on the other hand, knowing the true, intrinsic value of the shares is perfectly at peace during the market turbulences. He capitalizes on the opportunities thrown up by the market.  He purchases when the market is in extreme pessimism and sells when it is in extreme optimism.

The seller from whim the intelligent investor buys and the buyer to whom the wise value investor sells may be the same person, at two different points of time.