Human Nature (weakness) makes most Investors Lose Money

[Dennis Ng]

I share a common mistake (human nature) I observe in the stock market and you see whether you can identify with it.

I shared about a stock, saying its fundamentals is good and its upside potential might be 100% and downside risks only 25%....

then people just waited and waited....then the price goes up a little...people still waited....then price go up some more and they ask:"can I buy the stock now?"

Or share with you another scenario:
someone bought a stock at a high price. eg. buying a property stock which is trading at over 150% to its Net Asset Value.

Then the price drops, and the person ask, should I sell now? It does not make sense. If you're prepared to buy a stock when the price is much higher, when the price is lower, you should find it more attractive to buy, instead of worrying and asking should you sell.

Most people buy stocks without doing much homework. For instance, there are people who buy Genting Singapore at S$1.20 simply becos someone told them the price will go to S$1.50. Why S$1.50? They never ask. So they are just gambling but bluff themselves that they are investing.

When you buy a stock without doing homework and without at least estimating the value of a stock, you're just gambling, it is no difference than trying your luck at the Casino...