A Confident Perspective
It's a fact. Sellers know more than buyers. Why? Because they've been following the stock longer.
If you buy a stock on the same day that someone else sells it, as likely as not, that seller knows more about the stock than you do.
How do you use this knowledge? When you go to buy a stock, try to know as much about it as any seller of that stock knows.
If you can buy like a seller and sell like a buyer, you will always be successful.
Here's how to do it: When you are thinking of buying a stock, ask yourself the question, ``Would I be thinking of selling this stock if I already owned it?''
Do you really want to buy a stock that you would be selling if you were a long-time holder of that stock?
Sellers often sell after a stock has had a considerable run-up in price and it doesn't make any sense to own the stock any more.
Likewise when you go to sell, consider the point of view of those people who are seriously thinking of buying. Why would they buy this stock?
It is by getting above the situation and thinking like a seller when you buy and thinking like a buyer when you sell that you maintain a confident perspective that aids you in both buying and selling.
©Edward Abbott 2004