A friend told us there is little value on small illiquid: "I like this track, but given its low liquidity I'm afraid to be blocked if the During fall. Let's call this friend Michael.
Michael, if you're convinced that the title you've seen is in quality and that its intrinsic value is stable and is 100 € and now you can buy at 60 euros : what will you do if in an illiquid market plunges under the EUR 40?
Especially not panic! At 40 EUR, only the price fell, not the value of title. This means that you have then a unique opportunity to make an excellent case. Leverage technique is mechanically increased by lower prices.
He who panics and sells its shares when the price drop when no fundamental explanation for the specific indicator drops, commits a misjudgment. Indeed, we must not forget that markets are inefficient by nature and value and prices are mostly disconnected.
Suppose that every day you buy your wand at your baker to EUR 1. During a period of two weeks, your baker decides to divide the price by 2, or 0.5 euros for the same quality rod. Do you stop to buy bread?
Michel weapon yourself with patience and if you have cash, in such a case, hesitate not to strengthen thee in thy worth favorite.
Finally, remember: the price is what you pay and value is what you get . Then at constant value, if you were willing to purchase this title at 60 EUR to 40 EUR dark!
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