Important Trading Rule

Contrary to popular belief, the objective of trading is not to buy low, and sell high. Don’t buy something just because prices are low.

Buy because you think it’s going higher. The past matters but the trajectory matters even more. Being fixated on buying something low will likely result in you missing most of the major market trends. Tech stocks are a case in point. The prices of tech stocks (especially great business models) are generally high relative to the past.

Stocks are not T-shirts or discount furniture. It does not matter if the prices are low or not, it only matters if the prices are going to be higher or lower in the future.