Back in the heady days before the global financial crisis, Macquarie Group Limited’ a (MQG) share price nearly reached $100.
Then, in the bad old days of the GFC, the MQG share price fell to $15. Investors often say they like to buy stocks that are cheap and sell stocks that are expensive – very rational. The other theory of investing is that stocks get expensive when everybody ‘loves’ them, and they get cheap when everybody ‘hates’ them. This second statement is based on emotion. It is possible that these two theories can be reconciled when we accept that, due to emotion, stocks can get both cheap and expensive.