I suddenly and quickly realized a fatal flaw with my buying system for investing. It sounds smart. Putting money in stocks based on how far they are from their price target, but thanks to Nvidia and Apple I realized the problem with it. Nvidia is having troubles. You might have heard. It is national news.
I do consider this a good buying opportunity because I don’t think all of it is going to have as big of an impact as a lot of other people think or that the price action shows. It has dropped a lot over the last couple weeks and more and more concerns are coming out.
There is a saying in the stock market that people buy when they should sell and sell when they should buy, and it is a very confusing one, because there are a lot of problems with trying to predict the stock market. It can’t be done. The future is completely unknowable, and people all the time misjudge luck for genius. The real strategy is to set yourself up to benefit from luck.
With that aside out of the way I am going to bring this back to Apple. Right now Apple is being treated like a safe harbor stock for those afraid of the unwinding of AI stocks. Which is also ironic because those stocks are delivering earning upon earnings upon earnings. Showing massive revenue growth and in a weird self fulfilling prophecy people are exiting AI stocks because they are afraid that the financing won’t allow it to return value to investors causing it to not return value to investors.
Either way Apple has become the defensive stock for this and it has gone up and up and up and while it seems like it should come down who knows when that happens. Let’s say it doesn’t come down until it hits $450 and then falls back to $400. If I don’t buy at $350 then I miss out. That is the danger with systems and why they need to adapt quickly.
You see Nvidia has troubles and its price target was cut quickly while Apple has no problems and its price target isn’t being raised. The reason is an analyst will look like a genius if Apple hits the price target it is right below so there is no motivation to move it while the stock is going up, meanwhile while a stock is going down an analyst will look like an idiot not lowering it.
