More than once, someone has asked FatCat if he or she should dump the ABC or XYZ stock. Why? Because the stock you hold has lost 20% or 30% or even 50% of its face value? The obvious but often ignored fact is that when stock is bought or sold, it is the ownership of a corporation that is bought or sold. If the fundamentals of the corporation is not changed, why should the value of the stock? If a piece of property was great buy at $5 why would it become a hot potato at $2? Should it be a better bargain? Of course, things could change in the fundamentals of a company and cause it to become a hot potato. In this case, it should be sold regardless of the market price.
FatCat believes that investment is not gambling. She buys a stock when it is worthy of purchase and sells it when it is over valued. In plain English, buy low sell high. Unfortunately, many people do the opposite. Hope you are not one of them.
