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Buy low, sell high? Think again

Simple ratios like price-to-earnings or price-to-book can give false signals to investors

Sometimes, the mistakes we make in the market are sins of action as much as sins of inaction. We buy high when we should have avoided the temptation to do so, and should have sold instead. We sell low, thinking things will get worse, when in fact they don't, and we should have bought or held on to our shares instead.

CONVENTIONAL market wisdom tells investors to "buy low, sell high". It sounds like a no-lose proposition. Who doesn't want to do that?

You can always say you use fundamental analysis to decide a stock's intrinsic value so you know when is low and when is high. But reality is never that