Is It Time To Sell When Everybody Is A Buyer?

Discussion in 'General Trading Discussion' started by longtermbull, Feb 15, 2020.

  1. longtermbull

    longtermbull Administrator Staff Member

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    While I seem to be highlighting Tesla, this is just one of many very interesting scenarios which emerge time and time again. When the share price was sub-$200 in the summer of 2019, there was no interest from analysts, many had written them off with some suggesting they had a negative value. So, when the shares nearly touched $1000 what were analysts saying then? Yes you guessed it, they all turned bullish, increased their share price targets with one even suggesting the shares could hit $7000 in five or six years.

    With the shares likely to remain in demand for some time to come, is now the time for those with a significant profit to start reducing their exposure? Is this the perfect sign, when all analysts have turn positive and the sky is blue for as far as the eye can see.
     
  2. Buyonthedips

    Buyonthedips Senior Investor

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    The longer you monitor stock market trends the more obvious they will become. One very important one tends to revolve around converting long-term bears to a more positive outlook on a particular stock. If bears hold the position for so long as the share price moves higher and higher, there is often inevitable pressure to go with the flow. Once the most negative of analysts have moved to a more positive outlook, this might well be the time to sell – common sense has gone out of the window. Momentum and a lack of sellers can push the price up to unsustainable levels.
     
  3. Chartman

    Chartman Senior Investor

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    The current Tesla share price is a prime example of looking to sell/reduce your holding when everybody around you is clamouring for stock. Once this share price turns, and it will turn down at some point, it will be difficult to get out in any real size. This recovery in the share price from sub-$200 has pushed way way ahead of any reasonable expectations but what if, just if, there was a whiff of disappointment about the company’s next announcement?
     
  4. gowiththeflow

    gowiththeflow Senior Investor

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    Once the long-term bears have changed to bulls this is very often a sign that individual shares are becoming overvalued. Don’t believe me? Just look back in history….
     
  5. Junior Miner Student

    Junior Miner Student New Member

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    Even if this is not directly linked, it does make sense.
    Although I have to also mention what Mr Buffett was quoted as saying, 10 years ago in the times magazine (which I can't link because It's telling me it's a can of hogwash) Don’t buy when everyone else is buying. “Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance,” Mr. Buffett wrote. The obvious corollary is to be patient. You can only buy when everyone else is selling if you have held your fire when everyone was buying.

    So I will instead post a few pictures and then go back to mentioning Vanadium(that was kind of ignored until that trade war mentioned before last year's end) did start to loom over...[​IMG]
    The very last one is neither from him nor Bruce Lee yet it still is timeless, in and of itself.
     

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  6. gowiththeflow

    gowiththeflow Senior Investor

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    Sheep - that is what springs to mind when I read this thread.
     
  7. Chartman

    Chartman Senior Investor

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    The simple fact is that blind faith in a share can drag even the most bearish of analysts on the journey - when everyone is buying, the best time to sell is not too far away. Why? Simple, people have lost balance.
     
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