Falling Knives …
Every Trader and every Investor KNOWS it … NEVER touch a falling knive …
BUT:
Even the RICH do it …
Examples?
Bank of America bought a stake in Countrywide Financial … thinking, it was cheap … RESULT … the stock is (SINCE THEN!!!) OFF AROUND 75% …
Warburg bought a stake in MBIA, the bond insurer … hey … IN DECEMBER!!! … RESULT … the stock is OFF around 65% …
Lewis bought a stake in Bear Stearns … CHEAP? … No way … stock is OFF around 30% …
So … NEVER EVER believe somebody, that something is CHEAP or TOO EXPENSIVE. The market decides 
Easy rule to save a LOT OF MONEY? Never buy a red candle and never sell a green candle 
Tags: Bear Stearns, BoA, Countrywide, wisdom
