InvestorQ : What if I ask a stupid question as a trader in the market?
divya Sing made post

What if I ask a stupid question as a trader in the market?

Answer
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Diya Chitale answered.
2 years ago


Remember that there is nothing like a stupid question in the stock markets. There are stupid answers, inadequate answers and inappropriate answers. Here are some ideas for you to consider.

Firstly, don’t get swayed by chartists and high sounding technical analysis. Quite often chartists advise you to buy above a certain level and sell below a certain level. A fundamental question you need to ask is, if Reliance was a good buy at Rs.1150/-, should it not be a great buy at Rs.790/-? Logical, right!

Secondly, the market is always the king and it always has a story to tell. If you expect the markets to behave in a certain way and it doesn’t, don’t blame the markets. That is the way markets. As a trader , you need to read the cues from the market, interpret these cues and trade accordingly. This happened in the case of Kingfisher Airlines. Investors were calling it a great value buy, but markets were ignoring it. The market was giving a message that all was not well at Kingfisher. Eventually, it turned out, that markets knew a lot more.

Lastly, learn to differentiate between a good company and a good stock. There are excellent companies which may be lousy buys just because they are either too overpriced or most of the good news is already factored into the price. This is a cardinal mistake when investors do not ask questions. For a good company to become a good investment buy, it must achieve cash flows, profits and scale. It took Infosys over 18 years to become a good buy! The only value of stock forecasters it to make Fortune Tellers look extremely good and elegant, is what Warren Buffet said in his eloquently simple manner.