Stupidest reasons to buy stocks

A hilarious e-mail making the rounds these days tells the story very concisely and warns investors about the pitfalls of the stock market.

The e-mail says:

If you’ve ever bought a stock for any of the reasons mentioned below, you know it is time to hit the books.

  • 1. It will double in 2 years. (Sensex at 6500).
  • 2. It will double in 1 year. (Sensex at 7000).
  • 3. It will double in 6 months. (Sensex at 7500).
  • 4. It will double in 3 months. (Sensex at 8000).
  • 5. It will double in 1 month. (Sensex at 8500).
  • 6. Company is doing a private placement/FCCB.
  • 7. Company is going to give a bonus issue.
  • 8. Company is going for a stock split.
  • 9. Debt restructuring package.
  • 10. Low PE. (What does it mean, isn’t it because the company has no earnings?).
  • 11. Looks good on the chart.
  • 12. Company has got a big order.
  • 13. They are planning an expansion.
  • 14. Company has won some order from China.
  • 15. Wal-Mart is outsourcing.
  • 16. Market will go to 15,000.
  • 17. Rakesh Jhunjunwalla (a leading Indian stock broker) is buying.
  • 18. Warren Buffett is buying.
  • 19. Reliance Capital is buying.
  • 20. A big operator is buying.
  • 21. Fidelity is buying.
  • 22. Japanese are buying.
  • 23. Some fund is buying.
  • 24. The research analyst said it’s undervalued. (Analyst know nothing. Period.)
  • 25. They have lots of property.
  • 26. Company is going for a buyback.
  • 27. RSI is low.
  • 28. Good story.
  • 29. It’s a long-term secular bull market.
  • 30. My broker says it’s a good buy.

Even more stupid reasons to justify ‘your’ stock picks (when they’re falling).

  • 1. My research analyst has also bought it. (. . . the analyst know nothing.)
  • 2. I am not a market timer. (Obviously.)
  • 3. I am a value picker these market fluctuations mean nothing to me.
  • 4. My cost of acquisition is very low.
  • 5. I like the business model.
  • 6. It’s got good support at these levels.
  • 7. I think market has bottomed out.
  • 8. The stock looks oversold.
  • 9. RSI is still very low.
  • 10. This is just a correction.
  • 11. Some big fund bought at a higher price. It will definitely go back up. (The big fund that bought thinks the same).
  • 12. It’s a long-term secular bull market.
  • 13. A lot of money is waiting on the sidelines. (Yes and it’s waiting to buy all the stocks you own.).
  • 14. I am an investor I buy and hold.
  • 15. It’s a good company.

So next time you decide to get into the stock market, do remember these points.

One Reply to “Stupidest reasons to buy stocks”

  1. I truly agree what you say…there so many stupid reasons that people believe in and what they dont believe in is there own money :)good thoughts ur spreading…keep rockincheers

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