stock or currency that is determining how far the run will
at its own yearly high must go.
be judged for the
A stock at mid-range
possibility of going higher. It presumably has a demonstrated
would quite possibly be a risky potential for achieving a higher
buy unless the upward momentum level, but the course of its
were pronounced and the action should be plotted to see
indications of further progress whether it is at mid-range
were clear. through a series of small ups and
The width of the range also has a downs, or whether mid-range is
bearing. A stock near the high of simply the current point of a
a 10-point spread between high downward slide—or, for that
and low is likely to be less matter, the current point of a
volatile than one near the high gradual climb.
of a 50- or 60-point range.
A stock or currency at its low
The implication is that if a should also be examined for hints
stock can cruise upward through a as to the reasons for this state
range of 50 points, it can with of affairs. It might best be
equal ease slide that far shunned—but not too quickly.
downward. Obviously, stocks do
For if it seems inherently
not operate forever within sound, although low in relation
predictable ranges. But an issue to its group or the market as a
that has caught investors' eyes, whole, it may be a sleeper, the
and has started to run ahead of kind of depressed, overlooked,
itself, its group, and the market out-of-favor stock that offers a
can be considered to have a fine opportunity for the investor
future. Its high-low levels of who is not afraid to run against
the past can be viewed as less the tide.
significant, and the investor's
Theoretically, at least, this
effort can be bent toward is the kind of bargain that
diligent investors are supposed lovely opportunity. DuPont was
to dig up for themselves. Be under 100, General Dynamics was
clearheaded; most depressed in the 30's, Union Carbide in the
stocks are hovering at low levels 60's, Central & Southwest was at
for a reason. But the market is 19 everything that is solid,
capricious enough to low-rate glamorous, and soaring today was
many issues for reasons having at bargain basement prices.
nothing to do with fundamental
The alternatives are many. The
values.
combination of factors that bear
The depressed issue usually on any one issue at any one time
offers a better possibility for is almost incalculable.
improvement than the generally
One final point is personal.
depressed group. If oils or Some rigor must also enter into
chemicals or rails are the investor's calculations.
unfashionable as a whole, there Caution is necessary and
is, in most cases, a large reason praiseworthy. But once an
for it. Customers are over investor has decided he is
inventoried, sales are down, a operating as soundly as he knows
competing industry has cut into a how, he must be prepared to act.
market something has occurred It is a human failing to want to
which requires a fundamental be right.
correction before the industry
There are few feelings more
will again seem attractive.
discomfiting than knowing one has
figured wrong. In investment,
The depressed market, like the however, this can be an extremely
depressed stock, often has great hampering element. The unhappiest
possibilities—if the investor can kind of wrongness of all is to be
satisfy himself that he is unable to take the bold step, and
getting in at an appropriately then find that one has missed the
low level. The low of 1953 was a boat.
Decisions infected or realize on it, don't delay. Sell.
paralyzed by doubt and fear are Or, if you are thoroughly
no decisions at all. The point convinced that there is no
comes in all investment decisions advantage in waiting for the sour
when there is no more figuring to performer to improve, sell. Take
do, when no more answers can be the loss as a tax deduction, and
squeezed from the facts, when use the funds you have salvaged
results can only be revealed in to get into something better.
an unknowable-future. At that
Beyond these fairly clear-cut
point, the investor must take his situations, the confusions
courage in his own two hands and mount.
act.
Many investors these days
Selling is not necessarily the avoid them by taking no action at
opposite of buying. While there all, arguing that any
are the usual factors about the considerable profit they have
stock, the industry, and the realized will be so heavily
market to weigh, one crucial fact reduced by taxes that it's just
is known: the price you paid. The as well to ride along and see
amount of profit or loss, what happens and in a rising
therefore, is always settled for market, what happens is often
the investor approaching a very pleasant.
decision to sell. If the profit
You should also make use of
is satisfactory, or the loss software in shares and Forex to
insupportable, sell.
help you plan your sales. This is
There may be further profit to becuase modern software has years
be gleaned; the loser may turn of information in its database
around and cut the loss a few and can help you to predict the
points. But if you believe you best time to sell for a good
have an ample return on your profit.
investment and are ready to
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