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If you follow that logic, each time stock goes after good earnings, everyone should just sell off everything.
by justapassenger 5y ago
If you follow that logic, each time stock goes after good earnings, everyone should just sell off everything.
- deleted 5y ago[deleted]
- nostrebored 5y agoThey should, provided transaction fees and gains taxes don’t exceed their estimation of the difference in value times the number of stocks adjusted for the time value of money. People with more complicated positions should consider covariance and factor in uncertainty. But if you’re a shareholder in a single stock and estimate that it’s overvalued by a significant margin, the rational choice is to sell your position, invest in a low risk, highly liquid asset, and rebuy.