Recently I was watching a financial broadcast where a guest said something peculiar. The program was focusing on a specific company and the guest suggested something along these lines: "I bought two months ago, you saw that the price has fallen a lot, so that didn't work out." That was it. No follow up. No caveat. Just "the price declined in two months, it failed."
I find that to be a terribly difficult way to go about the investing world. Now to be fair, in our everyday lives this type of thinking can make some sense. For instance, if we're half way through the NFL season and your favorite team is say 1-7 you can probably go ahead and discount their playoff chances. Yet in the investing world, this logic does not hold at all.
What happens to a given security's price (read: liquidity bids) tomorrow, next week or year does not have to have an influence on your long-term results? The stock doesn't know you bought it and suddenly now have expectations. In the long run things will more or less work out, but there's no requirement that the results have to formulate on your schedule.
