Go Do Billy » market http://www.godobilly.com ...how everybody can succeed in business Fri, 26 Feb 2010 17:32:26 +0000 http://wordpress.org/?v=2.9.1 en hourly 1 How does a stock market begins to fall from bull market when there is enthusiasm and optimism everywhere? http://www.godobilly.com/market/how-does-a-stock-market-begins-to-fall-from-bull-market-when-there-is-enthusiasm-and-optimism-everywhere http://www.godobilly.com/market/how-does-a-stock-market-begins-to-fall-from-bull-market-when-there-is-enthusiasm-and-optimism-everywhere#comments Fri, 26 Feb 2010 17:32:03 +0000 admin http://www.godobilly.com/market/how-does-a-stock-market-begins-to-fall-from-bull-market-when-there-is-enthusiasm-and-optimism-everywhere Like in the bear market starting 2000, what caused the bull market to start falling suddenly when there was optimism, ALMOST in everyone. I am not concerned with a certain bull market, but any general one is ok.

What’s happening now is short-term B.S. caused by an inexperienced Fed Chairman, and mutual funds (growth portfolio’s) unloading holdings at the Dows all time high a few weeks ago. Every investor has a trigger price. They figure out what price to buy and what price to execute a sell trade. Great investors buy great stocks when the price is low and sell when the price is high, then buy the same stock when the price is low. This is basically what’s happening now.

The same thing happened in 2000. Smaller investors got burned at the expense of smarter and bigger investors. Smart investors new that companies in 1999 were trading 200 to 400 times there earnings, however people kept buying. They (smart investors) invested in these companies, let the money ride for a while, and started to sell off when the train started slowing down. Then mutual funds and institutional investors followed. They realized that tech company XYZ never made a nickel, but their stock price was selling at $200 a share. By the time this was exposed to the average investor it was too late. All that market was, was smoke and mirrors, and a lot of rich people got richer.

Inevitably, people control the market. There’s no huge computer throwing random quotes out. People decide the price, just like EBAY.

If your rich play the market. If your average, build wealth, and invest in mutual funds.

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