RE:RE:Another leg down for the 'hoTops,
This hasn’t happened to me just once. It’s an experience I’ve had time and again. There were many occasions when my own due diligence told me a company was far more valuable than a thinly traded market suggests. I’m not saying charts have no use. They are very useful to decide when to buy, sell, or hold. But they can’t tell you if a business is actually a going concern. I’ve seen mining stocks defy gravity and trade at high valuations despite the fact fundamentals dictate they’re obviously marginal or completely unprofitable.
Charts are not based on logic or reason. They only follow investor sentiment. In my experience, perform due diligence to decide where a company is headed, and then use charts to decide entry and exit points. However, it gets complicated for companies like IVN, which eventually become takeover targets. When the offer finally arrives, there is usually no indication through charts. One day no one wants it, very light volume for months. The next everyone is piling on the bandwagon. And if you’re on the outside looking in, it’s very hard to swallow you must pay double or triple for something on your watchlist you could have bought for much less yesterday. In these markets it’s hard to maintain trading discipline, even for someone like myself, who knows how to perform detailed financial analysis. It’s easy to get frustrated. We’re like polar bears sitting patiently for hours by an air hole in the ice, waiting for the fleeting appearance of a tasty seal.