Do you have respect for Market Wisdom and Crowd Behaviour?

The stock price movement is, in effect, more often or not conveying the collective wisdom (TA and FA) of the entire market; but some time this collective wisdom will be over-powered by the madness of crowd behaviour - forces of greed and fear.

'I can calculate the movement of the stars, but not the madness of men.' - Sir Isaac Newton

This madness of the crowd normally doesn't last long. Soon the market storm will be over and calm return to the market and once again the collective wisdom of the market will continue to drive stock price - either up, down or side-way for another period of time.

For a shorter while, yes, you may go against the madness of the crowd and benefit from it; but for a longer while it is still better to respect the collective wisdom (TA and FA). It is always worth asking yourself why you are right and the market is wrong? How come you seem know more than the market through publicly disclosed materials while smart money and big boys are not? In fact, most smart money and big boys have more access to non-publicly disclosed materials and they should be better informed than most retail investors.

We mustn't forget that these smart money and big boys have only one objective in the market - to make money for themselves and their investors. For a longer while, they are unlikely not to discover any market gems. So after 1 or 2 year of holding the stock, if the stock price still doesn't move in your favour, most likely you are wrong and the market is right.