The Balance of Odds

the balance of odds:

it was the time of the Asian Financial Crisis. by 1998 HSBC stock had plummeted. though he had quit gambling on the stock market for four years, he sensed an opportunity, that HSBC stock had reached a low.

now buy low and sell high is the only directive in share investment. selling high or exiting a profitable trade is probably an easier decision to make than the two harder questions of what to buy and when to buy.

interest in the stocks of young companies in new or existing industries always exists, but the probability of failure and inherent risk are always high. as long as there is an economy, there will always be banks. he was betting that HSBC would not go bust and that it would recover eventually.

probability is rather nebulous when applied to share price movements, but as HSBC fell the odds of it falling lower were reduced in his opinion.

by 2000, the price of HSBC had more than doubled, almost trebled.

CLEARCHARGE