Stock market irrational exuberance today two typical examples
June 5, 2020
Stock market investing
Why do traders and investors invest in stocks? Why do we analyze and monitor stocks and stock markets? Here we focus on the US stock market. Investing is different than trading. Investing is about choosing stocks to buy, stocks to sell based on financial analysis and for a longer time period. Trading is about stocks to buy or stocks to sell and make a profit either daily or within a very short time period.
Stocks to buy vs stocks to sell
Investing requires patience, time, finding stocks to invest in, best stocks to invest in 2020, cheap stocks to buy now, types of stocks to invest in and other popular searches such as top 10 stocks to buy right now, best long-term stocks to buy right now, best-undervalued stocks to buy now, penny stocks to buy.
Two stocks that do not make sense now to buy
- Hertz Global Holdings, Inc. (HTZ). The stock closed at 1.5000,+0.6837 (+83.76%) on June 4, 2020. Hertz Global Holdings, Inc. has filed for chapter 11 bankruptcy.
- Luckin Coffee Inc. (LK) stock, with a stock price of 4.0500,+1.4700 (+56.98%) on June 4, 2020. The recent revelation of fraud has caused the stock to decline a lot.
Stocks move on speculation
Both of these stocks from fundamental analysis and without having any bias are in the sell list for me, based on the financials and the recent news. Yet trading is another thing. Hertz Global Holdings, Inc. (HTZ) stock may soon get delisted. The risk is too big. And Luckin Coffee Inc. (LK) stock has an accounting fraud.
We prefer to invest and trade stocks that are safe, based on our financial analysis, checking the fundamentals always., performing due diligence. rather than gambling on stocks to invest in, we analyze stocks to buy and stocks to sell. This is the essence of being a financial analyst. Greed, fear, the desire to make money in stocks drives their prices often irrationally. You can subscribe to our stock market newsletter and get access to our stock picks.
As a legal disclaimer, I have not any shares of Hertz Global Holdings, Inc. (HTZ), or of Luckin Coffee Inc. (LK) stock shorted in my portfolio. And I do not express an opinion for stocks, keep them for my stock market newsletter. But facts and opinions should be differentiated. For these two stocks, we have facts.