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Stocks like Nike, Sbux, CMG have given good returns. I want to buy them cheap, and my common strategy is to wait for some bad news to get market down. But is it a good idea to buy them when there is an quarterly earning miss and stocks tumble?

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    What are classic returns ? – oldergod Oct 29 '15 at 0:11
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    You are essentially asking if you can be sure the stocks will go back up in price? – ChrisInEdmonton Oct 29 '15 at 0:48
  • what happens if that bad news is indicative of more serious problems? VW have just taken a massive hit due to the emissions scandal, so should I buy them expecting a bounce back given that costs and writedowns related to the scandal will last many accounting periods and the stock price will reflect that? – MD-Tech Oct 29 '15 at 9:08
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What is cheap? A stock may fall from $20 per share to $10 per share, but it may have gone from making a $100M profit last year to a $100M loss this year. So now at $10 per share it may still be considered expensive.

You need to be very careful when to consider that a stock is cheap or not, you'll have to look at more than just the share price.

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