Don’t think only Chinese investors have the herd mentality. The similar things happen to American investors too. One thing I noticed is there are lots of investors club in the States. They have meetings, discussions, etc. I went to the IBD (Investors Business Daily) Meetup at St. Louis once, and I received the group email from time to time. The group meets once a month. Here is the emai I got on Mar 13:
“Today’s heavy volume selloff (see B2 of the IBD), across all corner’s of the market means we’re going to have to reload. Although some stocks have come back nicely
after the initial downdraft on the 27th of February, the market hasn’t had a follow through day and cash is still the safe place to be unless you want to try to fly without wings. Keep your powder dry and wait,…”
And I received this one on Mar 21:
“The S&P 500 and the Nasdaq Indexes both had follow through rallies today as the market has once again entered a confirmed rally. Remember, a follow through day requires that one of the major averages advances at least 1.7% on heavier volume than the prior trading session. Typically this occurs on day 4 to 7 after a rally attempt begins. The first day of this rally was Wednesday, March 14 so this was day 6. The S&P 500 advanced 1.71% and the Nasdaq was up a robust 1.98%. So what do you do now? Some of the leading stocks had held up well in the correction by remaining above their 50 day moving averages and others making new 52 week highs. Don’t chase stocks that are more than 5% past a proper buy point…”
So what’s my point? I think while it’s educational or entertaining sometimes to join a meeting or an online discussion forum, or talk to a friend who “knows” stocks; nothing can replace the independent homework (or research). I hope my blog will inspire my readers to think about business and investing intelligently, but don’t read my blog and buy stock based on that 🙂