Freddie and Fannie…These stocks dipped to historic lows after everyone learned of their financial issues. Yet, days later their prices had doubled. No new information, at least good information, had come out suggesting strength in these securities. Now, the bad news is confirmed again, despite the overall outlook on the stocks staying the same, and they go right back to where they were to begin this whole cycle. I understand that stocks are cyclical in nature, but this should not include a run up of 100% and a crash of 50% over the course of a month.
The market is showing ridiculous amounts of volatility due to uninformed investors making terrible decisions. I don’t know how this could be rectified while allowing educated individuals without licenses to continue to make trades.
Even, now, people are forced into buying stocks that they know are no good because of the lure of profit. There is profit to be made off other people’s continued poor decisions, but this seems to encourage buying with no rationale, replacing research with “this might go up” mentalities.
All I ask is that someone at least know the P/E ratio of the stock they are about to buy instead of buying it because the symbol is their child’s initials.
Submitted by Chris Bailey
