1.
Panic Buying of Investments Is a
Bad Sign
By www.ProfitableInvestingTips.com

2.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
A friend of ours commented
recently that panic buying of
investments is a bad sign.

3.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
He is old enough to remember
when the three Hunt brothers tried
to corner the silver market and
failed.

4.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Panic Buying of Silver in
1979 to 1980

5.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The boom and bust of silver prices
is remembered as Silver Thursday,
March 27, 1980.

6.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Silver was trading at around $6 an
ounce in early 1979 and as the
brothers purchased increasingly
larger amounts of silver on margin,
the price rose to $49.45 by January
18, 1980.

7.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
By that time the three Hunt
brothers controlled a third of all
silver on earth that was not in
government hands!

8.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Our friend commented on how
people were taking money out of
their bank accounts to buy silver as
the price went up.

9.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Specifically, when the plumber
came out to fix a leaky pipe at our
friend’s home, the plumber
confessed that he had “invested”
his life savings of $30,000 in silver
bullion so that he could retire soon.

10.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The sad fact of the matter for our
friend’s plumber is that the COMEX
tightened margin requirements with
Silver Rule 7 and when the price of
silver fell ever so slightly, the Hunts
did not have the cash to meet their
margin call of $100,000,000.

11.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
They had to sell at huge losses and
the price of silver fell by half in just
four days.

12.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Silver traded at $15 an ounce by
June of 1982 and at $6.46 in
January of 1993.

13.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Needless to say the plumber lost a
large portion of his life savings.

14.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Hunt Brothers Testifying before Congressional Committee

15.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Panic Buying of Bitcoin

16.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Our friend is now well into
retirement and living in Latin
America.

17.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
He met a realtor in the coffee
growing and mountainous region of
Colombia when looking at property
there.

18.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
This was in December of 2017.
While Bitcoin had started the year
at $900, it was approaching
$20,000 and everyone wanted to
know how to join in the profits.

19.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The realtor admitted that she had
emptied her bank account and
bought Bitcoin at $15,000.

20.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
She was so pleased that her
investment had gone up right away
and that her Bitcoins (3 of them)
were worth $19,000 each!

21.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
She, like the plumber two
generations before, envisioned an
early and comfortable retirement.

22.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Our friend used his best Spanish in
trying to relate the story of the
plumber, the Hunt Brothers, and
the boom and bust of silver.

23.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The lady kept talking about how
anyone with any sense should be
buying Bitcoin right now (¡Ahora
Mismo!).

24.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Bitcoin peaked on December 17,
2017 at $19,783.06 and by
December 22 was selling for
$13,800.

25.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
By February 5, 2018 you could buy
a Bitcoin for $6,300 and by
Halloween the cryptocurrency had
stabilized at $6,300.

26.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Our friend has not had any further
contact with the realtor but
suspects that any plans for an early
retirement have been put aside
indefinitely.

27.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Bitcoin Debacle

28.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Panic Buying of
Investments Is a Bad Sign

29.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The twin demons of investing are
fear and greed.

30.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Warren Buffett has often been
quoted to the effect that the time to
buy is when everyone is afraid and
selling their investments and the
time to sell is when everyone is
buying in a panic.

31.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The point is that stocks, real estate,
commodities, Bitcoin, and the rest
all overshoot their fundamental
or intrinsic value when investors
imitate lemmings and march in
large herds to their doom.

32.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
This works both in bull and bear
markets.

33.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
And, because the memories of
some investors are as short as
those of the lemmings, it happens
again and again and again.

34.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Panic Buying of
Investments Today

35.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
CNBC writes that panic buying is
likely to drive up stock prices in the
near term.

36.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Stocks could get a short-term boost
as fear of missing out on gains
leads more investors to plow more
money into the U.S. equity market,
analysts said.

37.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The S&P 500 rose more than 2
percent last week, posting its
seventh weekly gain in the last
eight.

38.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The surge in stocks comes as
investors increasingly bet China
and the U.S. will strike a trade deal
in the near future.

39.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
It also follows the Federal Reserve
signaling it will be patient in
tightening monetary policy.

40.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The rationale of smart investors
who are buying stocks today is
probably that the trade war will
averted at the last minute and that
the stock market will resume its
upward climb as the Fed backs off
from its interest rate increases.

41.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Unfortunately, as we wrote recently,
we could win the trade war and
lose on investments.

42.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
What is important to note in
the CNBC article is that they
project a “short-term boost” and not
necessarily a resumption of a
strong and sustained bull market.

43.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
In this regard panic buying of
investments is a bad sign.

44.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Buying shares of companies like
Apple, Amazon, or Microsoft today
should not be compared to buying
silver when the Hunts were
cornering the market or when
everyone went crazy about Bitcoin.

45.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Nevertheless, there are real
concerns about the economy, both
local and global, and particularly in
over-grown and debt-heavy areas
like China.

46.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The Trump tax cut was, in the end,
a bust for hiring and
investment and will have added
another trillion dollars to an
already-huge US national debt.

47.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
There may be hope for investment
offshore in places like Brazil simply
because they were hit so badly
when commodity prices collapsed
that they have room to recover and
because they are still a developing
nation with lots of infrastructure
needs.

48.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Take-Home Lesson about
Panic Buying of
Investments

49.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
The bottom line of this trip down
memory lane is that panic is not a
viable investment strategy.

50.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Whether you are scared that your
investments will lose value or that
you are missing out on an
opportunity, jumping the gun and
selling or buying in response to a
moment of panic is a bad idea.

51.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Panic buying of investments is a
bad sign for the markets because
this usually leads to an overshoot
in prices which will then correct,
sometimes greatly.

52.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
Then the latecomers to an
investment will suffer all of the
damage.

53.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
As we repeatedly advise our
readers, doing
routine fundamental analysis of
your investments or investment
opportunities is where to start.

54.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
There are certainly times when
investment opportunities arise and
moving quickly is the only way to
make a profit.

55.
http://profitableinvestingtips.com/profitable-investing-tips/panic-buying-of-investments-is-a-bad-sign
But, smart investors limit their
scope of investing to what they
know and pass on getting into
investments that they do not
understand and where they cannot
adequately assess the likelihood of
future profits from increasing cash
flow.