Here's a central concept about the stock market that many
people lose sight of: It's a market of both buyers and
sellers. When someone buys a share of stock, it's because
someone else sold it. When you're bullish on a company,
someone else is bearish on it. So don't let yourself get
overly swayed by any particular bullish or bearish case made
about a stock.
No matter how obvious something may seem to you, you can
always find someone who thinks the opposite. There are plenty
of reasons why that may be the case. When you buy a stock, a
seller may have bought shares at a much lower price and be
looking to cash in. Or a seller may just need the money and
not care about the price any longer. On the other hand, a
seller may be focusing on negative information about the
company, while you're more positive on its prospects.
See for yourself
You can see this phenomenon in action every day. Here,
for example, are some stocks that most investors
don't love, as they haven't recovered from their losses
in the same way many stocks have. They have many detractors,
yet they're still rated highly in our
Motley Fool CAPS community, so it's clear that some
investors still believe in them.
Company
CAPS
Stars
(out of 5)
1-Year Return
Aflac (NYSE: AFL)
****
(30%)
ConocoPhillips (NYSE: COP)
*****
(36%)
General Electric (NYSE: GE)
****
(26%)
Monsanto (NYSE: MON)
****
(30%)
Data: Motley Fool CAPS, Yahoo!
Finance.
Even the most-loved companies on CAPS have at least some
high-rated All-Star members who think they'll underperform
the market. Take a look:
Company
CAPS
Stars
(out of 5)
All-Star Underperform Ratings
Johnson & Johnson (NYSE: JNJ)
***** Continued... |