We have always been hearing that stock market is about “Big fish vs Small fish”. But, this statement is not entirely fair and true.
Retail stock traders are not the only one losing money, wealthy stock traders and many professionally managed big funds in the market are losing millions too. So, Big fish are also being beaten up.
In fact, many small traders like them, because these Big Fish helped to move the market, and as a Small fish they could ride on the rising wave and benefit from the price movement.
Stock market should instead be appropriately viewed as a case of “Those Who Know vs Those Who Don’t Know”.
“Those Who Know” will often be picking the right stocks, buying or selling at the right moments and profiting from rise in stock prices. They do not sell stocks unnecessarily.
While “Those Who Don’t Know” will be doing the exact opposite, making too many mistakes, picking and trading on the wrong stocks, and selling stocks unnecessarily.
A stock market crisis is an opportune moment for “Those Who Know” to pick up value stocks at low prices. While “Those Who Don’t Know” would panic during crisis, prematurely abandon their trading positions in an attempt to get out as soon as possible.
