When it goes up, it goes down

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Serial published “Trading Philosophy”……2

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In my corporate days, I asked the branch manager with a ruined piece of equipment in hand.

“Please replace it.”

After thinking for a few seconds, the branch manager timidly replied, “It’s still usable…,” so I carelessly dropped it onto the floor and, finding no choice, asked again, “It’s completely broken, so please buy a new one.”

About 30 years ago, this is an episode when a fresh first-year employee was defeated by gravity (laugh).

Last time, I introduced the philosophy that “stocks are for buying.”

“Stocks are a stake in a company; the company is an organization that pursues profit,

→ It’s natural to buy in anticipation of an increase in value.”

In response, there is a way of thinking that stocks are for selling.

The energy that raises stock prices comes from investors’ “buying.”

There are people who sell, so prices exist, but as long as new buyers keep entering, stock prices rise.

So, what about the energy of a bear market?

Do short sellers push prices down? No, that’s not it.

When buying energy weakens, prices fall.

If the pace of new buyers slows, the rise in stock price slows, and afterward, with gravity, it moves downward.

In the low-price range with zero popularity, there is no force from above or below.

When a company grows and its “strength” increases, the stock price in the zero-popularity period also rises, but the principle is that an uptrend is achieved by force being applied and lifted.

“The upward movement of stock prices driven by buying power is contrary to natural law.”

“The downward trend after hitting a top is a very natural direction.”

People who think this favor a selling strategy that targets declines (short selling).

It’s hard to throw a ball high (because you’re fighting gravity).

It’s easy to drop a ball from a high place to a low place (gravity does the work).

That is the logic.

Fifty-six years ago, on April 12, 1961, the world’s first manned spacecraft, the Soviet Union’s Vostok 1, was successfully launched, and Major Yuri Gagarin’s words “Earth was blue” became a catchphrase.

A spacecraft rises against gravity.

Just like a meteoric surge in stock prices.

But stock prices will never reach the space where thrust is unnecessary.