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The financial and technical analycies presented on this website have not been performed by an Investment Services Company, nor have they been compiled by a certified analyst . It is simply a display and presentation of public data of Greek and foreign shares with informative and entertaining character.

Sunday, January 22, 2023

The quickie's mother never cried, but she never laughed either

Many times rationality in economic science goes for a walk. This of course applies to many things in life and not just finances.

So there is a phrase that many stockbrokers say: "the mother of the quick never cried". We can only half agree on the above. Clearly, if we have invested in a stock that is not doing well, the company is constantly making losses, debt is increasing and sales are shrinking, then we have no choice but to abandon the ship before it sinks. The sooner we do it, the less damages we will pay. If we delay too much, the chances of having a total loss of capital, jeopardizing our entire financial planning, increase. Such decisions are made mainly when we invest in high-risk positions and know in advance the risk of our investment. In these cases, a stop loss order may be necessary. Also if one has borrowed to buy or sell stocks then he is forced to work for quick profit. Most likely, of course, it will work with a quick loss. All of the above is also true in case of cyclical stocks, where usually the sharp rise lasts six months to a year and then the price adjusts back to reality.

But if your sights are on long-term strong stocks with good dividend yields and healthy balance sheets, then your mother is more likely to cry than laugh. To cry not from the damages, but from the huge loss of potential profits that you will have. Things are simple. If we have a stock that doesn't move much in price, and has a dividend yield that equals or exceeds inflation, it makes absolutely no sense to work with 10% or 20%. The return we will get in the long term from dividends alone, far exceeds this percentage. In this case the quick trades will only succeed in gnawing our capital faster due to fees. Of course, the above also applies in a case where we have invested contrarily in a share which has been under pressure, for many and various reasons, but is not under bankruptcy status. A lot of patience is needed here and we need to take our time when the bullish channel starts. It goes without saying that we should wait to sell in the final frenzy. The pain we will suffer if we see the stock go up and we are out, while we had a good position in, is much greater even than the loss. Believe me…

This is what we have to note for today and the fact that when we use expressions, proverbs or anything else we should know that for every saying there is also its opposite. In closing, I would like to express my belief that the truth is always somewhere in the middle and that there is no absolute recipe for success. All that matters is at the end of the day being a winner in a world where most are losing…


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