BIG BOYS a.k.a INSTITUTIONAL Clients, Private Clients, Rich Fat guys have been making 10-40% annual returns.
However, there are small time rookie traders – this includes rookies with 10 years of experience – who have lost a lot of money in the stock market and some have lost total confidence in the market.
The reason is simple. There’s only one.
Be Patient….
We small timers are very greedy people and since we are not rich, we have the drive to make money to join the league of the rich. As a result, small timers make irrational trades. We call it itchy fingers. We like to press the BUY BUY BUY button just as Jim Cramer slams it.
Small timers buy at the wrong time.
This is what goes on in their thought process:
“hmm, I need to make money. The market is so high now… maybe it will go higher. Should I buy some shares of xyz now? I want to make some money before this weekend. Okay, I am gonna buy some….
10 Jun BOUGHT xxxx shares at $10.5
11 Jun BOUGHT xxxx shares at $10
12 Jun SOLD xxxxx shares at $9.3 (#@Q$*!)
Since small timers already pre-empted to make some money before the week ends, they have assumed that the stock will DEFINITELY (yea right?) move in that direction. As a result, they make the trade without deep analysis.
Even if they make some analyses, they are biased and only sees the points that are in favor of their HOPE and refuse to see any points that would lead to disaster.
STOCK DIVE…. PANIC starts to build up.
Small timers start cursing and swearing.
BIG BOYS start to place buy orders..
Small timers sold their shares to the BIG BOYS..
(to be continued)
Not gonna end the story that fast, PLEASE BE PATIENT………….
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