Stocks and Shares Investment ==> Know About Stocks And Shares

"Two of the biggest stock market geniuses of all time, Warren Buffet and Jessie Livermore have always gone through long periods of holding cash. They only buy when there are positions out there worth buying, and when everything seems to be going in the right direction."
*-- Warren Buffett - Strategies Of World's Greatest Investor

If you are one of the many people out there that wonders how famous investors like Warren Buffet have made a ton of money, you're not alone. The truth is they make money not based on what they know, but what they consistently keep doing in the stock market. If you think about it, these successful investors like Warren Buffet are doing something in the market that is very uncommon in practice or else everyone would be doing it too. If everyone followed the same practices of the good investors, they would all be rich just like Warren Buffet.

What is it that these famous investors like Warren Buffet do to make money? 

When you start to study into what all the famous investors have in common, you will find that they practice some form of contrarian investing. Contrarian investing is the belief that most stocks are continuously over-priced or under-priced. Contrarian investing is also the same as value investing which is talked about a lot these days. Value investing is also the belief that most stocks are priced at extremes that are too high or too low.

If we want to use this information to make money, we must mimic what other contrarian investors do investing in the stock market. We must buy when most people are selling, and sell when most people are buying. Contrarian investing is not a comfortable or easy task, however, for an investor to grasp. You will be buying stocks falling in price from people selling, and selling stocks going up in price from people buying. The theory of contrarian investing is to simply do the opposite of what everyone else in the market is doing. Going against the grain in the market is a difficult but yet very rewarding task in the long run.

Contrarian investing works because most moves in the market happen for no legitimate business reason. Most market price fluctuations that you see happen everyday are simply products of fear and greed. These moves are not legitimate and are based on people's inborn inclination to be overly optimistic or pessimistic about a given situation. I hope that people realize that from now on, that making money in the stock market requires living off the fear of the crowd. This will not be an easy change for many, but in the end you, will be rewarded for your persistence.

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