Enjoy predicting the downs? If you’ve been trying to maximise your gains from calling bottoms in a fluctuating market, you’re probably striking out. While this can be a minor frustration for a period or two, it can cause major financial, emotional, and physiological losses in the long run. So we’ve compiled a list of some of the major downers, a “do not enter” list for investors down on their luck. If you’re stuck in an investing rut or just call bottoms unsuccessfully, you need to read this.
What’s wrong with Bottoms?
Why is bottom fishing so dangerous? Shouldn’t we take advantage of depreciating stocks? The answer lies in understanding the difference between the price of a stock and its value. If stock prices go down, often the value will also decrease, so you probably won’t be able to make back what you paid for it. Sinking ships aren’t prone to recovering in a faltering economy.
Bottom line, you are always better off trading according to the current trends, letting some other sap be the one to take the risk on betting against it. Now for the list you’ve been waiting for. These companies are not making it right now, so you’d be best advised to steer clear of them altogether:
Sears Holdings’ negative cash flow and top/bottom line declines make it a shoe-in for no-fly lists.
- Wynn Resorts has suffered a crippling 62.03% nosedive this year, and the future isn’t looking much brighter.
- Sotheby’s boasts poor interest rates and inflated borrowing, and no growth or demand to speak of. Need we say more?
- Twitter does not seem to be cutting it against the competition. Down 55.51% this year, Twitter just isn’t performing.
Movie theatres is another depreciating market that will continue to be on the down, so don’t put all your stock in Picturehouse Cinemas just yet.} else