Stupidest reasons to buy stocks

 

A hilarious e-mail making the rounds these days tells the story very concisely and warns investors about the pitfalls of the stock market.

The e-mail says:

If you've ever bought a stock for any of the reasons mentioned below, you know it is time to hit the books.

• 1. It will double in 2 years. (Sensex at 6500).
• 2. It will double in 1 year. (Sensex at 7000).
• 3. It will double in 6 months. (Sensex at 7500).
• 4. It will double in 3 months. (Sensex at 8000).
• 5. It will double in 1 month. (Sensex at 8500).
• 6. Company is doing a private placement/FCCB.
• 7. Company is going to give a bonus issue.
• 8. Company is going for a stock split.
• 9. Debt restructuring package.
• 10. Low PE. (What does it mean, isn't it because the company has no earnings?).
• 11. Looks good on the chart.
• 12. Company has got a big order.
• 13. They are planning an expansion.
• 14. Company has won some order from China.
• 15. Wal-Mart is outsourcing.
• 16. Market will go to 15,000.
• 17. Rakesh Jhunjunwalla (a leading Indian stock broker) is buying.
• 18. Warren Buffett is buying.
• 19. Reliance Capital is buying.
• 20. A big operator is buying.
• 21. Fidelity is buying.
• 22. Japanese are buying.
• 23. Some fund is buying.
• 24. The research analyst said it's undervalued. (Analyst know nothing. Period.)
• 25. They have lots of property.
• 26. Company is going for a buyback.
• 27. RSI is low.
• 28. Good story.
• 29. It's a long-term secular bull market.
• 30. My broker says it's a good buy.

Even more stupid reasons to justify 'your' stock picks (when they're falling).

• 1. My research analyst has also bought it. (. . . the analyst know nothing.)
• 2. I am not a market timer. (Obviously.)
• 3. I am a value picker these market fluctuations mean nothing to me.
• 4. My cost of acquisition is very low.
• 5. I like the business model.
• 6. It's got good support at these levels.
• 7. I think market has bottomed out.
• 8. The stock looks oversold.
• 9. RSI is still very low.
• 10. This is just a correction.
• 11. Some big fund bought at a higher price. It will definitely go back up. (The big fund that bought thinks the same).
• 12. It's a long-term secular bull market.
• 13. A lot of money is waiting on the sidelines. (Yes and it's waiting to buy all the stocks you own.).
• 14. I am an investor I buy and hold.
• 15. It's a good company.

So next time you decide to get into the stock market, do remember these points.