29 Oct 2020
Is it a good thing to buy stock during pandemic ? Since the stock price is low, won’t it be better to purchase at low price to get a hand on it and wait to appreciate and sell off?
I do know when there is a bad event, those investors holding the company’s stock will sell it off when the stock price has dropped, does it mean for those who cannot purchase before since it is very expensive, won’t it be a good time for those who haven't bought it before ? Specifically one investor out , one potential investor in.
In general, if you are talking about buying in a global sell-off due to a black-swan event, yes. The reason for such sell-offs are usually because of two reasons: 1) funds being overleveraged and forced to sell to meet margin calls and, 2) general fear causing clients to pull funds and funds selling stock to raise cash.
But i assure you, when presented with such a situation, unless you know what you are buying like the back of your hand, your own psychology will prevent you from doing what you described.
However, just because a stock price is low doesn't mean it's cheap. There are reasons why it trades as such. And the unfortunate reality facing investors is value is largely dead, and it's all about growth stocks now in a MMT world.
"Buy when there's blood on the streets, even if the blood is your own" - Baron Rotchschild
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