10 > Trust Homework, Not Hunches
In the second half of 2014, oil prices made a gradual and remarkable decline from about $105 a barrel to about $45 a barrel. The price of stock in Exxon Mobil, the world’s largest oil company, declined steadily with the price of oil. I found it hard to resist that quality company on sale for a bargain price. I felt the price of oil had fallen too far. I admired the company as a sound business. I figured I wouldn’t mind owning Exxon Mobil stock long term. I bought a bunch.
Over the next few weeks, the price of oil rose modestly, but my Exxon Mobil stock fell. That left me scratching my head. As I watched the price of oil, the price of stocks overall, and the price of Exxon Mobil stock interact, I began to understand ...
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