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Ann: Appendix 3B, page-36

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  1. 852 Posts.
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    When people panic sell on a dramatically dropping market or as their stops are hit they quite often buy back into what they sold once the dust has settled. I've done this myself.


    But you only buy back into something you have conviction with or which is exhibiting strength. On big down days with a broad max exodus across the market people who have otherwise been content to sit on their BUD loss finally dump in a panic along with the market. However once they're out there's little motivation to rebuy BUD when the general market recovers. This can result in whatever your holding not recovering with the rest of the market, because those burnt, now free of the shackles can finally invest elsewhere.
 
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