Scenario 2: Conclusion
You chose to sell all of your shares. You probably made this decision for one of the reasons listed below.
You knew that the numbers suggested you should buy, but hey, you don't play by normal peoples' rules.
You knew this was a scenario about an "irrational market" so you decided to make an irrational decision to outsmart the computer.
You lost control of the mouse and clicked on this by accident.
You just got done with scenario # 1 and figured out how to outsmart this scenario.
If you chose option 3), please go back and try the scenario choices again.
If you chose option 2) or 4), you are destined to make millions in any stock market game that runs as a computer simulation - but alas, if it were that easy.
If you haven't guessed it by now, the price of ABC seems to be on its way down - for no apparent reason. When you sold everything, it seems you have made the right choice. But before you go patting yourself on the back, remember that you made the right choice in an irrational market. (Is congratulations an appropriate word or not?) You sold, when all the fundamental signs were telling you to buy.
The hardest part about being invested in a market like this (aside from the money you just lost) is knowing when to buy shares again.
The market might behave like this after a long-term growth phase. Although, there are examples of the market simply losing ground over an extended period of time because investors saw better opportunities for their money. This would result in a general drop of PEs for the whole market.