Retail investors are piling into shares of BP PLC in big numbers, betting that they can scoop up a bargain as the oil giant’s share price crumples. Most of them ought to be playing their hand more cautiously, according to one investor behavior guru.Earlier today:
“We’re seeing a lot of new investors who have never traded in BP now trading in the shares, and sad to say, a lot of them are buying,” said Jay Pestrichelli, a managing director at online brokerage TD Ameritrade who is tasked with keeping a close eye on investor behavior among Ameritrade’s 6 million clients.
The sadness, Pestrichelli explains, is based on his belief that much of the enthusiasm that’s made BP the brokerage’s most highly-traded stock among so-called “active” retail investors is based on a misguided belief that they can call BP’s bottom. “There’s a reason why they say you don’t try to catch a falling knife,” says Pestrichelli....MORE