Nintendo stock down 9% last 2 days

[theRepublic]

HappySqurriel said:

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.

Reminds me of a quote I saw recently:

"Warren E. Buffett, the Berkshire Hathaway chief, criticized the trading culture of Wall Street, which he says offers incentives to generate fees and fast profits. Over lunch with Andrew Ross Sorkin, he said he was skeptical of the modern-day hedge fund industry and added that his preferred strategy was still to buy and hold, Mr. Sorkin writes in the DealBook column.

It concerned him, for instance, that he was able to buy the equivalent of 10 percent of I.B.M. in six to eight months because of the market’s liquidity. “The idea that people look at their holdings in such a way that that kind of volume exists means that to a great extent, it’s a casino game,” said Mr. Buffett, who was in town to discuss a new book about his career, “Tap Dancing to Work,” by Carol Loomis of Fortune magazine."

http://dealbook.nytimes.com/2012/12/04/buffett-on-the-state-of-wall-street/