My Worst Investment was My Best Investment

By Brian J. Regan, CFA

The best investment I made this year and the worst investment I made this year were the same stock.

Brian J. Regan

Brian J. Regan

I typically buy stocks where I believe the stock price is below the company’s intrinsic value. On any given day the intrinsic value does not have any impact on the price of the stock. There are a number of reasons why a market participant would buy or sell a stock that has nothing to do with the business, here are a few: delta hedging, liquidity need, index participation, day trading, algorithmic trading, investor sentiment, investor politics, margin calls, and technical analysis. Market liquidity and volatility are inevitable outcomes of auction markets.

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