It’s only in the stock markets that trees are expected to grow to the skies.
During bull markets, as long as someone is willing to pay sky-high prices for shares in companies that had never made profits, that didn’t even have a sales track record and represented nothing more than a big bright bet on the future, stocks are rarely considered expensive.
So they rise, and rise, and rise…beyond all levels of sensibility.
But when crisis strikes, and the reality sinks in that stock prices can never always rise and rise and rise – just like trees can’t grow to the skies – people who had bet stock prices to sky high levels earlier, crash land.
See, dear investor, it is very easy to get captivated during rising stock markets and give in to believe that the trend would continue to eternity.
But, as you learn from the crisis like what we’re seeing now, this doesn’t happen.
So when you are in the next bull market (yes it will come!), or hear someone promising you quick millions from stocks, just don’t give in to the temptation.
Trees never grow to the skies, except if you are Jack climbing the beanstalk.
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