A convenient way to think about trading

Believe it or not

In the world of the stock market, your “customer”, regardless of who they actually may be, is buying for the same reason you probably bought your item originally, because they believe the price will go up and they can sell it to someone else for a profit at some point in the future .

Whatever is driving that belief – be it an insider tip, a great sales pitch or a delusional fantasy of riches – it is critical that there be a belief (aka a “guess”) that prices will go higher at some point in the future. A very important question to keep in mind is if an owner of a stock believes it is going to go up in price why would you they sell it to you?  What is it that they know that you don’t or vice versa?  That question makes more than just convenient food for thought; that’s exactly what makes a market.

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