It never ceases to amaze me how people can become irrational because of what the market is doing. Sometimes it's arguing about why SGH isn't a dead stock and clinging to hopes and dreams. Other times its abandoning your logic for investing because the stock is down.
Investing requires a steel mind that requires one to either hold or abandon their position based on whatever is most sound. Here's how I tend to operate:
- I make a judgement call about the value of a company; is it financially sound, is it likely to have issues, are bankers willing to continue lending etc
- If the share price goes up or down, it doesn't particularly matter (though I personally pay special attention to trends to try to profit from them).
- If I begin to question my investment, I ask myself if my original rationale for investing has changed. Would I buy into the stock knowing what I know now? What's changed?
Arguably this allows for one to both ignore short term price movements or change their mind about a stock without becoming irrational and clinging to it.
Let's all become more rational, less emotional, and be nice to one another in debate.
SGH Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
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