This is a joke.
......
Once upon a time in Wall Street, there were 2 traders, Mr A and Mr B.
They trade a can of sardine with each other. Mr A sells the sardine to Mr B, and Mr B sells back the sardine to Mr A, then Mr A sells it back again to Mr B.....the process keeps on repeating without end.
In every trade, each party is able to sell the sardine at a selling price higher than buy price. Therefore, this ensures each party make profit in every trade!
In the long run, Mr A and Mr B both made good money by just trading the sardine to each other.
One day, out of curiosity, Mr A decided to open up the canned sardine to see what's inside, to understand why it is worth such a high price. Mr A was shocked to find that the sardines are actually rotten!!
He was so angry and go confront Mr B for selling rotten canned sardine to him.
Mr B replied, "Why do you want to open the can??? The sardine is meant for trade only, it is not meant to be eaten!!!"
......
Moral of the story:
1. Stock price movement is solely based on investors recognition on the share, and the price they are willing to pay. Price may not match the value.
2. It is all about investors' imagination and perception towards the stock.
3. A lot of times, hot stocks traded at high price are actually lousy companies, like the rotten canned sardine, until one day investors started to find out the truth, before the stock price plunged.
4. It is about the art of avoiding buying rotten sardines
5. It is about the art of exiting the market before people realize the market is full of expensive, and may be rotten canned sardines
6. Trading stock is just a game of trading a virtual contract, base on the market's hope, greed and fear.
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