The silly things investors say

David MoonBlog

About once a day I hear an investor (both professionals and individuals) say something completely nonsensical. Here are a few.

“It’s a blue chip company; it has to be safe.” (Ask the American Express investors who’ve lost 24 percent this year.)

“It’s already gone down 75 percent; it can’t go down much more.” (Wrong; it can go to zero.)

“I’m going to wait until it starts going up before I buy any of that stock.” (You’d prefer to pay a higher price?)

“They say this stock is going up.” (Who is…“they?”)

“This investment guarantees me 8 percent, and I can’t lose money.” (Right.)

“This is a technology company; earnings really don’t matter.” (Can you say “IPIX?”)

“Some big Wall Street firm has a buy rating on the stock.” (Wall Street buy/sell/hold ratings are intellectually dishonest.)

“I predicted the market was about to decline in 2008.” (You also predicted it in 2009 and 2010 and 2011 and …)

“My house is a great investment.” (Your house is a place to eat and sleep.)

“This stock is a strong buy.” (As opposed to a weak buy?)

“Things are really uncertain right now.” (When aren’t they?)

“The company’s earnings missed analysts’ estimates.” (No; the analysts’ estimates missed the company’s earnings.)

“Other than our house and some student loans, we don’t have any debt.”  (And other than that extra 70 pounds, I’m thin.)

“If this goes down I’m going to sell.” (Great formula for losing money.)

“There is too much uncertainty right now to invest in the stock market.” (There is always uncertainty.)

“That stock is a short-term sell, but a long-term buy.” (I have no idea what this means.)

“I think the stock will pull back then move higher.” (And I think Tennessee will lose some games, and win some.)

“This time is different.” (It is never different.)

“I don’t like the chart.” (The chart has no opinion about you.)

“I want to maximize my return, with as little risk as possible.” (Santa will be here in a few weeks.)

“I don’t want to take any risk, so I’m going to buy bonds.” (Call me after interest rates rise and let me know how that worked.)

“We are cautiously optimistic.” (You can’t spell “oxymoron” without “moron.”)

“I am going to sell it when it gets back to my cost.” (The stock has no idea what you paid for it.)

“Small company stocks are risky.” (No; companies that have no earnings, are highly levered or priced exorbitantly high are risky.)

“I want to buy some Acme Industries stock; I hear they are going to split their shares.” (Cut a pizza into 16 slices and see if it is more filling.)

“Conservative stocks don’t fluctuate much.” (Every stock fluctuates much.)

(A version of this post appeared as a column in the News Sentinel.)