Comments on: Buy Low, Sell High: You Are Stupid

By: jrdlst

jrdlst — Tue, 27 Jul 2010 00:54:41 +0000

“Buy low sell high” is a basic truth. That is the goal….the holy grail of investing. Anytime ive used the term it was not advise to another. It was a tongue in cheek – over simplified – comment about what we are all trying to do with our investment. Dont over anaylize….except when it comes to your investments.

By: gary g

gary g — Mon, 12 Jul 2010 17:08:19 +0000

buy low sell high is only believed by speculators. Right now that who is making money in the market. If you take buy low sell high to mean buy at the lowest price sell at the highest price you are stupid.

If i buy 1000 shares of a stock to day at $5.00 a share thru a broker that charges 4.95 a side with a trail stop or 7% and the price goes to 6.00 and i sell i gross $1,000.00 and net 9991.10. i bought low and sold high. The fact that the stock may have sold at a lower price the day before i bought it and might have gone even higher the day after i sold it is irrelevant.

as to the intellegent investor: it is full of info like the speculator tries to make a quick profit and will lose in the long run. There is no such thing as a quick profit in the long run. Speculators make quick profits in the short run again and again.

By: Ron L

Ron L — Fri, 30 Apr 2010 01:46:15 +0000

I am a broker and buy vehicles at a very low price and sell at a reasonable price…..am i one of those stupid douches. I make a lot of money

By: Pat Response

Pat Response — Thu, 25 Mar 2010 20:34:04 +0000

I have been investing for quite a while, and I agree it is a ridiculous response. However, you should not get so upset. I have seen this response used many times when dealing with non-investors. You are somewhat mistrusted by people who do not invest at all, and those who do not manage their own portfolio. This response is for dealing with those people. They don’t really want to know what you are doing. They just want to confirm their suspicion that you are either a gambler or a trustfund baby. This is the same for “spend less than you earn.” People really don’t want to know how to save money. They just want you to give them the expected pat response.

By: Nut

Nut — Thu, 07 Jan 2010 04:18:34 +0000

Pete: love the baseball analogy. Here’s the problem: we know that is a bad trade but GMs make it year after year. Why? Emotions. They have to make a trade to help push the team over the hump. Something, anything.
People do it with stocks all the time too: they have to buy “high” because they “know” it’s going to go up some more and don’t want to get left behind.
It comes back to psychology, which is the biggest hurdle stock investors face when starting out.

By: Pete

Pete — Wed, 30 Dec 2009 21:42:59 +0000

“Buy Low/Sell High” is not really “advice”, per se, but it is still the fundamental principle of investing.

Can be hard with stocks, but it’s not impossible in all domains. Let’s say I was the GM of a major league baseball team. I’m looking to trade for a starting pitcher at the trade deadline, and I see an 11-year veteran on the market having a career year with a 2.64 ERA.

Meanwhile, this pitcher is 35 years old and has a 4.10 career ERA. Is this a good time to trade for this pitcher?

The answer is no. This would be the quintessential “buy high” move. The upside is almost entirely constrained as the pitcher is performing at near ceiling, and the most likely scenario is downside—the pitcher regresses to his career mean performance.

Not that the pitcher is going to tank, per se (although in this example, the pitcher did. The Tigers “bought” Jarrod Washburn high, and he performed at a 1-3, 7.33 ERA for the remainder of the year). But as the GM/investor, you could have known better.

By: syw

syw — Thu, 24 Dec 2009 23:04:09 +0000

try programming your entry and exits and do some backtesting. when you get around 70% wins over a 10 year perios then apply some position sizing. you will be happy you did.

By: Nut

Nut — Tue, 28 Jul 2009 03:50:52 +0000

I’d love for you to share how market timing can help people build wealth with just “dedication and willingness to learn.” If you’re able to do it, good for you. But this isn’t for the masses. Trust me.

By: Riley

Riley — Fri, 24 Jul 2009 20:22:02 +0000

You are ranting and raving about how stupid people that say buy low, sell high are (which I agree with) but the rest of your post is just as ignorant and misleading. There are lots of great market timers out there though they are only a small percentage of the population. I’m a market timer and I make money doing just that consistently every week. There are too many people out there that spout this nonsense telling everyone it’s impossible. It just takes dedication and willingness to learn. Stop reading at the morningstar bullshit and investing blogs. Thats the way to stay poor and have to rely on your job for the rest of your life.

By: Nut

Nut — Sat, 28 Feb 2009 22:16:53 +0000

@FupDuck, I hope you get rich too and donate a significant portion of your estate to TWC…I’ll keep my fingers crossed for you…

@FFB, I don’t see that as buying low and selling high, I just see that as a responsible maintenance of your asset allocation. Once a year or so. I do it every time I buy more, which is quarterly, only I’m still 100% into stocks, I just balance it out depending on the % I want in each index fund.