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The Home Depot, Inc. Message Board

  • iinvestor47 iinvestor47 Oct 25, 2012 11:57 AM Flag

    End of Momentum for HD ?

    Another name for momentum when a stock is extended would be "the greater fool theory of investing" . When a stock is racing up, not based on fundamentals, but because it has "momentum" it will stop when the pool of potential buyers runs out of "fools" in this case defined by someone who buys knowing that something is overvalued, but buy its anyway in the belief that the game will continue and he wil profit by selling to another "fool". Problem is that this "game" will end badly for those who came in late- sort of like a ponzi scheme.
    I lost some respect for Cramer because he refused to "ring the bell" on this stock last week, when he said HD had "momentum". He did not do his listeners a service by not identifying the danger in buying high due to momentum.

    Sentiment: Strong Sell

 
HD
117.03+0.57(+0.49%)Jul 31 4:03 PMEDT