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Professor Explains Investor Mindset in Tumultuous Markets
Brad Barber, professor of finance, explains what investors are thinking.
 
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Posted 8:50 PM EST January 25, 2008
Posted by: pravchaw
I think most winners eventually become losers if held too long. If a winner gets over valued you need to sell it to lock in the profit. This 'sell' discipline is critical.
The trick is to recognize when the stock becomes over valued.
Posted 8:52 PM EST January 24, 2008
Posted by: jasmith563
If individual investors are the ones who lead the market how do they respond so fast? The other day the Dow dropped several hundred points in less then an hour. How can that many private/small investors get the bad news and react that fast at those volumes?

I'm an small investor and the market has reacted within minutes well before I even hear the news - good or bad. Has anyone done a study of private vs institutional investors buying/selling motivation? I just can't believe private investors can move the market that fast.
Posted 5:45 PM EST January 24, 2008
Posted by: ajrolfs1
I'm confused. Is it just me or are they saying that you shouldn't sell because that's panic; but you should sell because people don't like locking in their losses? I don't get it. Just stick to P/E and other metrics that you can predict and evaluate.
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