How do I explain this PSMT behavior? I believe that the correct positive reports in August encouraged many people to buy. This pushed the price up artificially. Then it reached a peak and people began to sell and the stock will probably return to its original August level. Granted I am not taking into account that the market as a whole has started to decline. This decline may have caused some of the price drop.
However, I believe that it was also people looking to make easy money. This is legitimate if the buyers realize that the company that is strong and likely to grow over several months but that there is still risk. I am saying the obvious but buyers have to follow the individual stock they buy, the industry that they are buying in, and the general stock market. They have to follow what happens every single day. They have to be ready to sell when they sense that the tide has turned. This is judgement call which is as much an art as it is a science.
As James Swagger asks, no one would read a book on brain surgery and try to operate, so why do people with little knowledge and experience invest in stocks? His answer is that investing appears easy and one can win sometimes. However, the newbie investor who does not learn about the market will soon lose a lot. Before or while investing one’s money one should invest his time and effort to learn about the market, the industry that one wants to invest in and the individual stock. Learn, enjoy and profit! Good luck!
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