Many people don't realize how much stocks can fluctuate. Now, I don't mean in a day, week or month, but over a little longer periods of time.
Advanced Automotive (AAP) was 169.12 on 12/1/16 and it moved down to 81.7 on 10/1/17. That is a 10 month period. The stock moved down 52%!
AAP today is about 135.22. So, it rose from 81.74 or 65%. in an eight month time period.
The points here are these:
- Mr. Market is erratic at times. The crowd shifts in general opinion in a short period and decimates a stock in short order. Then, he gets excited and goes extremely the other way.
- Not watching or reviewing history is a great way to over pay for those who don't paid heed to history. It is also a way to get some bargains! That is what interests me the most.
- Short term thinking can put you in a bad position. You can’t beat the big institutions on their turf, so go where they will not go and succeed.
- When the crowd abruptly switches opinion, take a closer look. They might have thrown the baby out with the bath water.
If you look carefully in many stocks, you will see this kind of fluctuation in full view. Many don't see it because they are looking too closely at the present and following the crowd. This situation is seen in Fortune 500 companies and smaller cap companies alike.
You don't have to be a rocket scientist to be successful in stocks, but you do have to control your emotions, be patient and stay away from the group think.
Buy your stocks like you buy anything else. Only buy when it is a good deal and you can be very successful!
