The notion of ‘Buy low sell high’ is usually the desired way to earn in investing.
So imagine you have done your homework analysing a strong company with great potential. And your valuation tells you that it is now at a cheap price.
You went ahead to buy the share. But to your horror, the share price seems to drop immediately right after you bought it. And it continue to slide further for an extended period right after.
This is a familiar scene. It happens often, even to me, and it is indeed puzzling.
Buy low sell high is inherently difficult. How low is low? How high is high? Will today’s low become tomorrow’s high or vice versa?
Everyone tries to buy low sell high. But when a trade goes through, there is always two side of the coin – buyer and seller. Surely the seller think its high and …