| Gamerace said: Don't pay much attention to what investors do. The majority of them are short-sighted and poorly informed, relying on the likes of Michael Pachter to advise them. People who do little more than guess themselves (just a little more educated guess). Investors actions do not necessarily reflect the value of a company. |
I wouldn't say they pay much attention to analysts ...
Part of the reason there are so many people pushing unsophisticated investors to put their money into stocks is related to the old saying "A fool and his money are soon parted". While you should probably be looking to buy and hold onto a stock for (at least) a couple years before you sell it, and be looking for a return of 5% to 10% a year, most unsophisticated investors are using the stock market as a get rich quick scheme and looking to get a 50% return every few months.
While a person can do well by looking for companies that are appropriately valued (or undervalued) that are likely to see the fundimentals improve over the next several years, most unsophisticated investors don't take this approach; they look to ride the rollercoaster of sentiment and time the peaks and the valleys, but it is very difficult to do this and most people lose a lot of money trying.
