The Stock Market’s “Great Paradox”

According to William J. O’Neil, the greatest stock market winners proved that the old adage “buy low, sell high” was completely wrong. In fact, the study proved the exact opposite. The hard-to-believe Great Paradox in the stock market is

What seems too high in price and risky to the majority usually goes higher eventually, and what seems low and cheap usually goes lower.

If you can’t bring yourself to buy a stock at a level it has never before achieved, ask yourself: What does a stock that has traded between $40 and $50 a share over many months, and is now selling at $50, have to do to double in price? Doesn’t it first have to go through $51, then $52, $53, and so on – all new price highs – before it can reach $100/

As a smart investor, your job is to buy when a stock looks too high to the majority of conventional investors and sell after it moves substantially higher and finally begins to look attractive to some of those same investors.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s