Right time to buy a stock is when the masses panic & fear takes over

Right time to buy a stock

The Right time to buy a stock is when there is blood in the streets

The ideal point to open up long positions is when a market experiences a crash like move hence the saying buy when blood is flowing freely in the streets. The masses are always on the wrong side of the markets; from the tulip mania to the last market meltdown which took place in 2008; they have always been on the side.  The green circles in the chart below highlight the best entry points. However, this is a very long-term chart and some pullbacks might not look as strong.

If the trend is up, its the right time to buy a stock

Remember, if the trend is up as it currently is, you should be salivating at the prospect of such a substantial pullback. In July 2015 we welcomed a healthy pullback, we embraced sharp pullbacks in Jan and Feb of this year, and we will embrace it again as long as the trend is up.  There is no reason to panic at the possibility of a strong correction. We are already preparing for such an event, and as of today, we are going to take a defensive posture.

If the trend is up, its the right time to buy a stock 

Fear always comes in the way of opportunity; you need to understand that. At the present time, it is best to hold your gunpowder until the market pulls back strongly. History indicates that after a very strong run-up, the market usually experiences a relatively strong pullback.

Sharp Corrections Equate to Opportunity

Until the trend changes, the theme should be to ignore the noise, focus on the trend and the stronger the deviation, the better the buying opportunity.   Market Update Dec 15, 2016

We might be in for a stronger than expected correction; we are not stating the bull is over, and we will not state that until the trend change direction.  However, given that the pendulum swings in both ways; the risk to reward ratio from a psychological perspective is not in our favour. This crowd is always skittish, so one hard slap of fear and they will crumble and scuttle for the hills; as the trend is up, the stronger the pullback the better the opportunity.  When it comes to trading, panic is the code word to buy. And remember, the right time to buy a stock is when everyone thinks its time to sell and hide.

Random thoughts

Focus on the simple factors, for that is what helps determine the trend; factors such as mass sentiment, and extreme patterns (technical analysis) on the charts.  The news is not an essential factor; in fact, toilet paper has more relevance than news; at least it serves a noble function; one cannot lay the same claim to news.

Anyone that advocates giving into fear should be thrown headfirst out of the front door(figuratively speaking that is) and never allowed back into your house or mind; fear never pays off; only the vendors of fear will make a handsome buck, the buyers will lose their pants, their shirts and their knickers too.

Why Experts fail when it comes to the stock market

Experts and or Market timers have such a dismal record and why they will continue to fail for the foreseeable future. These guys might get it right once, and in almost every case that is due to pure luck, for they fail to become two-hit wonders.  Market timing based on fundamentals and technical analysis always fails, and there is a reason for this colossal failure.

90% of advisers, experts, financial commentators do not know what they are talking about, which means the same rules apply to the masses. Want proof look, go back and look at how they repeated the same nonsense each time the markets were crashing and or surging upwards. They screamed that the world was going to end when the markets were pulling back, and they alluded that the Milky Way was the next stop for the bull market when it was rising. In both cases, they failed to spot the so-called top or the bottom.

Why do you need someone to tell you the obvious, do you need a jackass to tell you that the markets are crashing, when it is all but evident and vice versa. The only function these media wenches/experts serve is to inject emotion into the equation; make the masses sing right at the top and make them panic right at the bottom.  All these experts and or media wenches fail to account for one simple factor, and this simple factor overrides any of the other pressing factors they list time and time again

 The right time to buy stocks is when you feel the least reluctant to

No matter how many times we try to warn traders about the dangers of giving in to fear, a significant portion of traders give in to it and follow the well-trodden path of failure.   There is not one single trader in the world no matter who he or she is that can pull up a long term chart and prove that the following statements are false.

  • Market crashes equate to fantastic long term buying opportunities
  • Giving in to fear always leads to a negative outcome when it comes to trading.

In a nutshell, one can only win if one conquers the demon of fear; if one does not, it is just a matter of time before that person is separated from their hard-earned money if they are investing in the markets.  Following the mass mindset is very dangerous; the outcome is always negative.  No matter how any expert wants to spin it, there is no way to prove that back-breaking corrections or stock market crashes are nothing but stock buying opportunities over the long run.

If one wants to speed up their retirements, the best tactic would be to build up cash during the last phase of a bull market; the phase where the masses start singing. Additionally one can consider living 1-2 standards below one’s means; this should not be too hard as most individuals live several orders above their means. When the markets crash, use simple sentiment analysis and technical analysis to identify bottoming action and load up on quality companies.

Additional Food for Thought 

Today everything is interrelated; we do not have free market forces anymore. Everything is manipulated; from the food, you eat to data you are provided.  If you are aware of this, you can plan accordingly. Identifying the problem is over 80% of the solution, and this is why most people do not know what to do because they do not understand the problem. Now you know why we are the only financial website that covers such a wide array of topics that on the surface appear to be unrelated but are in fact, deeply interwoven.  Mass psychology is a very powerful tool, and if employed correctly can help you spot the abnormal levels of manipulation, the masses are subjected to. It would be a good idea to familiarise yourself with the concept of “ Plato’s allegory of the cave.

If you seek freedom, the 1st task is to attain financial freedom so that you can break free the clutches of the top players who strive to enslave you. They want you to run in a circle like a hamster that runs on a spinning wheel; the hamster thinks the faster it runs the further it will go, but sadly it is going nowhere.

We teach how to use Mass psychology to your advantage, how to view disasters as opportunities and how not to let the media manipulate you and direct you towards actions that could be detrimental to your overall well-being.  Visit the investing for dummies section of our website; it contains a plethora of free resources and covers the most important aspects of mass psychology.

Secondly, subscribe to our free newsletter to keep abreast of the latest developments. Change begins now and not tomorrow, for tomorrow never comes. Understand that nothing will change if you do not alter your perspective and change your mindset. If you cling to the mass mentality, the top players will continue to fleece you; the choice is yours; resist and break free or sit down and do nothing.

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