Sense in the Market: Why The Economist Is Wrong on Apple | Foolish Blogging Network


I’ve been reading The Motley Fool since Apple’s remarkable tanking two weeks ago. So far, Fool has been consistent in its observations regarding the irrational behavior of the market—namely, that what happened was nuts.

Here’s the money quote from today’s article:

There is only one basic truth why the market suddenly fell out of love with Apple, and that is exuberant expectations. The market expected Apple to grow at a double digit rate, each and every year. This, of course, is unsustainable. Because fear and greed are such dominant emotions in the market, a littleĀ sense of disappointment quickly turned into aggressive selling. It has nothing to do with the business or spirit of the company; it has everything to do with the minds and emotions of investors.

Keywords to note: fear, greed, emotions. If you have no stomach for these, you have no business investing in the stock market.

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