Jim Cramer from CNBC’s Mad Money has said, “Never underestimate the stupidity of Wall Street.”

He was at the time referring to overreactions. Perhaps when earnings reports were not as great as expected. Perhaps it’s due to something in the news.

What ever it is, people have a tendency to panic when stock prices begin to move in any direction. People will blindly sell their holdings when the price starts to dip. They will then jump on the bandwagon and buy when the stock has started to move up.

Looking at any stock that seems to take huge dips in price (do to overreactions and the panic of incompetent traders), they quite often seem to fall back into line moving back to the comfortable zone after a couple of weeks.

When a stock jumps up, they seem to return as well. The big difference is that when they are up they come down A LOT faster.

If you recall Google’s stock (GOOG) at the beginning of this year, they missed earnings and the stock plummeted down $80, but now they are back roughly where they were beforehand.

The reason I bring this up is because (at the time of writing this) I own shares of Microsoft (MSFT) or Mr Softy as our booyah buddy likes to say. They reported earnings on Thursday and didn’t do so hot. Friday their stock price dropped 12% to a 6 year low. OUCH! They drove the entire technology sector down.

Or is it just a big sale on the tech stocks?