RE:RE:All Shorts and Basher's…Take Notice!LAW OF WAITING. The longer you wait, the greater your chances for failure. This applies to both holding a stock which is declining and to a stock which is running. The odds are greater than 90% against you... that you will fail in a speculation, if you wait for it to recover or if you chase a stock which has already begun its run. Generally, a stock moves up in less than two weeks, often in two to five days. The waiting period, for a stock to allegedly recover, is the slow, dragged out retreat you later observe in the share price. As believers stop believing, the share price declines, often never recovering. Of course, if one wants to wait forever, then eventually the stock may recover. The longer one waits, during a runup, the smaller one's potential profits and the greater one's exposure to losses. (One important caveat: Occasionally, there are a few good deals--about 20 or 30 annually--when one SHOULD wait for the company to mature. Almost always, they come out of left field and, rarely, does anyone know in advance which company will become tomorrow's success story.)
AXIOM OF BELIEVING. The higher your expectations in a stock, the greater your chances of losing money in that speculation. All of the promotion is geared to make you a "believer." Most speculators are betting on a tip or a rumor. They are taking someone else's "word" for the outcome. Absolutely no one should invest or speculate in a stock without understanding the risks as well as the reward. Stock promoters create believers by providing ONLY the reward potential, without also including the risk factors. Believers eventually discover the risks, long after the stock has begun its decline.
LAW OF LOSERS. Oddly, those most attracted to speculative markets are failures in other aspects of their lives. They may be wealthy, but consider themselves, in some way, as having "failed." Medical doctors are prime targets of stock promoters, as they are not only affluent may have "settled for less" in their lives or feel they "are owed more" for the work they do. Whoever has failed, in some key aspect of their life, often tries to make up for it by gambling....often speculating in these markets. The loser is always trying to compensate for a failure in another part of his life and continues to heavily lose as a speculator. (Note: I stay in touch with certain losers and use them as a yardstick for my trading -- when they buy, I sell; when they sell, I buy. The loser has a knack for exiting his position, a day or a week before a major runup; or he/she simply always buys at the top of the runup. The downside to communicating with losers is that they are so darned indecisive and fretters; their worrying can and does rub off and creates a confusion for oneself.)