If stocks are bought without reference to value, they will in turn be sold without reference to value.
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When prices increase at a greater rate than can be justified by business performance, they must eventually stagnate until the value catches up or they must retreat in the directions of the value.
Only when a stock is bought at less than its value can price increases that exceed incremental increases in value be justified.
Investing is the intention to seek a required rate of return (RR) relative to risk, based on an assessment of value.
Investing in stocks is not about buying scrip that will go up and down in price, but about investing long term in a sound business that represents good value at its present price.
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