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The folly of using share price graphs in investment decisions

The share price graph is one of the most used tools in company analysis. Whether consciously or sub-consciously it undoubtedly always plays a part. Ask yourself if you’ve ever thought or heard someone use these phrases:

“The share price has rallied hard this month so we’ve missed out” or,

“The share price has doubled this year so it must be a good business”, or

“The share price has seen steady decline all year so I wouldn’t touch it with a 10 foot pole”.

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