” But the point is that the past performance of a share often has little bearing on its future return prospects. You don't drive your car by looking in the rear vision mirror, and you shouldn't judge the quality of an investment by how shares have behaved in the past.
This is what behavioural psychologists call 'anchoring', and it's an especially pernicious problem for most investors.
A stock isn't 'cheap' or 'expensive' simply by comparison to past levels. It's value is always a function of a company'sfuturecash flows, and it's there that we should focus our efforts. That's a much harder proposition than simply eye-balling a price chart , but the rewards certainly make the effort worthwhile. “
AdVictorium , looking through my emails this morning the above paragraphs seemed relevant , I suggest that you read it , take as much time as you need , even if your eyes start to bleed , until you fully understand it .
All in my extremely caring and sharing knowledgeable opinion ......
NOR Price at posting:
1.7¢ Sentiment: None Disclosure: Held
