|
PureBytes Links
Trading Reference Links
|
>At 09:28 AM 3/14/98 -0600, diamond wrote:
>>If we assume that most amateurs are trading securities, what price
range do
>>95% of them tread in? In 100 share lots, what can most amateurs
afford?
>>I am curious about the above, because it might tell me (us) who we are
playing against; amateurs, professionals, mutual funds.
>>Zane Kori
>>
>Zane,
>This is just a guess, based on hearing many self-confessed amateurs
>talk about their trading. I would say from $1 to $20, but not often
>above $10. When someone recommends a $19 stock, or $40, or $99,
>they cringe and call it too expensive (regardless of the PE). But
>talk about one of their local $5 stocks and they can get quite
>excited. Then they rush to their broker and tell him "give me a
>buck's worth of XXXX.
>
>Pete
RT'ers,
I think the approach of amateurs would always be tied to the level of
the ongoing trend. At the end of bear phases and start of bull phases,
they are overhung with fear and would go in for below 20 stocks as they
percieve lesser risk in those. The principal driving force at this time
is only risk and fear of losses. As the trend gathers strength, they
move on to stocks in the 30-70 ranges as the fear recedes and greed sets
in. At such times they also continue to pick up the low ones in the
10-20 range as they see them now as multi baggers. When the trend is
about to end, it is usually the topline stocks which are gaining the
most and the amateurs will then buy those with complete abandon as fear
is now completely replaced with greed and a new fear, that of being left
behind in the big bull ride will be the major driving force.
Dr.Narayan C.K.
Bombay, India.
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|