During this present period of extraordinary share price volatility there has evolved a casino-like atmosphere with regard to investor stock trading.
Margin debt is now at all time highs and many investors are holding to the view that "stocks always come back". There is considerable investor complacency but little fear. With the spate of corporate earnings disappointments, revenue shortfall warnings and tumbling stock prices we believe that investor discipline is now particularly all-important.
It is our sense that the volatile stock markets can cloud investor self-control and investment thought processes. While discipline may be very difficult in this constantly changing environment, we believe investors must remain sharply focused on investment fundamentals. But all is not bad. In fact, it is our opinion that investors should utilize the present share price volatility as an opportunity to buy or sell certain stocks which may momentarily become over or undervalued due to extreme market fluctuations.
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