Bad news all around us. Sell, sell, sell! This is what panic selling is all about. It is all driven by fear. But fear is not a bad thing. People are made with fear so when they can't rely on themselves they run and save themselves from destruction. But, those who are confident, trained for the occasions, may decide to stand their ground.
I have seen stocks dropped in similar pattern and then trebled. It is all about a person confidence in the stock return to its fair value. Firstly, that person needs to know what the fair value is, most don't. They buy blind and sell in fear. Secondly, most have the stock for 12 months, selling would trigger a CGT discount. But by selling and then re-buying, the second time round may be less than 12 months and no CGT discount. The second time round the stock could be $30, a profit of $26 (say bought back at $4), all taxable - compared to a person who bought at $2 and held ( many got in at 10c for the nickel and got short changed for potash lol), only $14 subject to tax. If that person holds 200k that is a $2.4 million difference in taxable income (more for the guy who got shortchanged lol). Disclaimer: I am not a tax accountant.
STB Price at posting:
$3.37 Sentiment: LT Buy Disclosure: Held
