Easier said, than done. Valuing a stock requires discounting all the future cash flows - no means an easy job. Moreover, the stock prices are anchored to fundamentals, which themselves keep on changing. Thus at times it becomes difficult to segregate ‘Noise’ from ‘changing fundamentals’....more
Controlling ‘Greed’ and ‘Fear’ are equally difficult aspects. Even hard core investors fall prey to these behavioral qualities. It is the fear only which keeps the investor away from stock investment even when he is flush with funds and valuations are luring. Similarly during good times investor becomes greedy and is ready to invest even with borrowed money....more |