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?

  • 1
    What are classic returns ? – oldergod Oct 29 '15 at 0:11
  • 1
    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

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.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.