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.
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| 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.
