Is it time to sell your Apple shares, or buy more at a discount? Most uneducated investors look at the 1-year chart, set to the linear scale, like this:
It's no wonder why people are running for the doors. But, if you look at Apple using the more "correct" logarithmic scale, and look at a 5-year window, it becomes immediately obvious that the latest AAPL drop is no big deal:
This is an excellent example of the cycle of fear and greed. Everyone knows the saying, "buy low, sell high", and it's easy to look in the rear-view mirror on any stock chart to see how you could have made money following that simple advice.
The forces of fear and greed work directly against the buy low, sell high strategy. When the market tanks, uneducated investors feel disheartened and sell. When the market flies high, uneducated investors get too excited to sell. If you know these things, you're probably buying more AAPL.
Monday, January 28, 2008
Linear vs. Algorhithmic Apple (AAPL) Chart
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5 comments:
The juxtaposition of your graphs is somewhat dishonest, dude. The first one covers 4 months in '07-'08 and the second one covers almost 5 years. It should be much clearer that the second graph is "zooming out" so drastically; otherwise, these statistics are lying.
@max:
lol. way to completely miss the point. Dude.
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