Wayne A. Thorp, CFA is a vice president and senior financial analyst at AAII and editor of Computerized Investing. Follow him on Twitter at @WayneTAAII.


Discussion

David from PA posted over 3 years ago:

Mr. Thorp sounds like an economist; " If it's not this, it could be that, or it could be something else, or maybe something else, etc., etc." I was so overloaded with information that by the end of Thorp's article I thought my head was going to explode.
I liked the guy who runs Investor's Business Daily: If it goes down 8-10%, don't screw around, sell it. There are plenty of other good stocks out there. Buy one of them.


Dimitri from NJ posted over 3 years ago:

David, you seem to be advocating a rather robotic action policy. What if that 8-10% decline presents a great buying opportunity (e.g. BP during the Gulf 'disaster')? Thorp does point out the analytical aspects one could follow.
On the other hand...you may be better off doing it your way!


John from OH posted over 3 years ago:

To reinforce Dimitri's comment, I believe BP Stock dipped briefly to $30 a share immediately after the Gulf disaster. But within six weeks, BP Stock had recovered to $45 per share - a 50% gain. Of course it's easy to be a 'Monday Morning Quarterback.'

Another recent example of a respected company's sudden stock plummet is Cummins Industries (CMI). Immediately after a report stating that CMI's accounting standards were more Questionable(?) than 90% of all companies, the stock took quite a hit. But CMI stock price has strongly recovered, (regardless of CMI acct'g standards).

I'm beginning to think that when a respected Industrial company 'stumbles' - it may represent a Great Buying Opportunity.


J from PA posted over 3 years ago:

Thanks Wayne Thorpe. You must be right be cause you advocate just what I am already doing. Still, it's nice to be reassured.


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