In the last few years there has been an explosion in the number of people investing in the stock market. This dramatic increase is partly due to the lower costs of trading, market swings during COVID, and to some extent the attention paid to “meme stocks” such as Gamestop.
Ben Felix is a portfolio manager (MBA, CFA, CFP, CIM) and he has a research-based YouTube series on investing. In this video he discusses the effect of technology on trading and how, for example, people trading on a cell-phone app make very different kinds of purchases compared to people trading on a desktop.
Some of “facts” behind a particular stock are purely mathematical and there isn’t that much gray area (e.g. price / earning ratio, company debt, dividend yield, etc). However, at any given moment there are people buying and selling the same stock and some of the interpretations of the data are better than others. The interpretation of the situation with a particular stock at a particular point in time is influenced by a number of factors that can sometimes lead to bad decisions.
Consider how these good and bad interpretations in investing are distinguished.
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