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?
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.