Finalmente qualcuno che ha capito !!!!!!!!!!!!!!!!!!!!!!!!!
The CONTRARIAN theory in investment in stocks and shares may be old hat. This theory in simple terms means : " when MANY speculators run INTO the market, thereby pushing the prices of shares higher and higher, the CONTRARIAN man does the OPPOSITE----- he jumps OUT. On the other hand, when MANY speculators panic and start jumping OUT, the CONTRARIAN man runs IN. " So, the Contrarian man BUYS shares when they are CHEAP ( when shares start dropping like ten-pins) and SELLs them when prices have shot up !
This theory was advocated by the Billionaire oilman, Paul Getty. he said that during the Depression years in America, share prices plummetted; and many speculators asked for his advice. He told them that they should BUY, not sell shares! All of them said he was mad. Most of those not only lost their pants but also their lives ( they jumped down from tall buildings ). Paul Getty stuck to his theory taht he should BUY, which he did, and kept the stocks for several years. His stocks were later worth a thousand-fold of what he paid for! Of course, he had holding power; and could wait for years for his shares to go up.
There is another theory popular among speculators and that is " the GREATER FOOL's theory." It is just like playing the musical chairs in school and society functions. a parcel is passed round the circle; and when the music stops, the person who holds the parcel is eliminated from the game. Now, a speculator always feels that there is a greater fool to buy his share.. But in reality, the market may suddenly stop going up . Instead, the prices may start coming down like nobody's business . In fact, it is nobody's business than this speculator's business . There are no more fools around to pick up the pieces!
Benjamin Graham believed in buying shares priced at 3/4 of Net Tangible Asset Backing . It gave him a margin of safety of 1/4 of NTAB. He believed that the share price would always try to move up to its VALUE's worth. In other words, he went for UNDERVALUED stocks. Warren Buffett, one of the top billionaires in the world, also believed in his theory. By the way he has a major stake in Berkshire Hathaway. He keeps his stocks for years and years. The market fluctuates and may go up and down; but he does not bother about the uncertainties of the market . He goes for long-term investment.