We all know that to in order to succeed in the stock market, we need to buy low and sell high, right ?
However, it is extremely difficult to time the market as there would be black swan events that could crush all your profit in one go.
Plus, how do we know whether the "low" is the lowest and the "high" is the highest ?
Therefore, we have to study investor's behaviour.. or gambler's behaviour.
Instead of predicting the price of a stock, predict the movement of gamblers by observing how they react to news.
Usually, they tend to overreact to news and creates the fluctuation in stock market. Hence, it is our chance to take advantage of the herd mentality.
When company X announced a dramatic increase in profit due to non-continuous activity (one time activity), investors would rush in and buy their stock and pushes the stock price to the new high because they thought a increase in profit means it is a good thing for sure.
But, you as the contrarian investor who understood gamblers behaviour, you understand that the increase in stock price due to investor's good sentiment on the stock price. By knowing that, you could take action and of course, sell high.
我们都知道要在股市中成功的话，必须要底买高卖，对吗？但是，我们要怎样知道到底哪里是低点，哪里是高点呢？就算我们能够猜中，黑天鹅事件也能完全破坏我们的盈利。
所以与其去赌股价的高低，倒不如去利用赌徒心态来进行底买高卖。赌徒一般都是追高抛低，那么我们要利用群羊效应来进行逆向操作而获取高盈利。
比如说X公司因为非正常营运而达到高净利，赌徒们就会相信X公司是非常好的投资，但他们不知道到底为何X公司盈利会增加那么多。
不过身为逆向操作者，你应该预测他们的动向，从而利用群羊效应来达到自身的盈利。如果你知道大市接下来会走哪步棋，那获取盈利不会简单的多吗？
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