There have been always a heated debate between people who use different criteria to select a particular stock such as company management, brand, financial ratios, future growth prospect etc and on the other hand people who use price as only criteria to buy/sell a stock on the basis of their movement in a particular direction. The fight will be never come to an end because both group of people think that their method is best and they are more intelligent than other people.
I too agree with the fundamental guys to the extent that which elaborates that valuations matters and stock will always eventually find out their actual price but i will always use price to make any trade or investment decision because no one in this world can predict at what point of time stock will be able to find out at its actual valuation. The reason for that is the people who are participating in the trading/investment world are the people who only work on the basis of their fear and greed. Whatever they would say in the starting but in the end they will always drive by their fear or greed because these two traits make the most influential impact on human being and they will always act according to it.
Due to fear and greed psychosis, participant will forget about the reality and the valuations things will go out of the window. So never try to fight with the might of the market because that is simple combination of the wish of participants in any particular market direction without bothering about the valuations and fundamentals. Follow the price and adjust your opinion based on the wish of the majority not based on your forced opinion.
I too agree with the fundamental guys to the extent that which elaborates that valuations matters and stock will always eventually find out their actual price but i will always use price to make any trade or investment decision because no one in this world can predict at what point of time stock will be able to find out at its actual valuation. The reason for that is the people who are participating in the trading/investment world are the people who only work on the basis of their fear and greed. Whatever they would say in the starting but in the end they will always drive by their fear or greed because these two traits make the most influential impact on human being and they will always act according to it.
Due to fear and greed psychosis, participant will forget about the reality and the valuations things will go out of the window. So never try to fight with the might of the market because that is simple combination of the wish of participants in any particular market direction without bothering about the valuations and fundamentals. Follow the price and adjust your opinion based on the wish of the majority not based on your forced opinion.