Let’s say you bought a stock because the fundamentals looked solid, but then it dropped 10%, 20%, or even 50% over the next few weeks or months. What would you do in that case?
In theory, if nothing has changed fundamentally, averaging down makes sense. But sometimes it’s hard to tell if you missed something during your original analysis, and that’s why the stock is down.
Would you sell and cut your losses, hold and wait it out, or buy more?
Are you doubling down on losing stocks if fundamentals still look good?
byu/wojack instocks
Posted by wojack
30 Comments
Yes
I bought more SoFi in the last month. I don’t regret it, nothing changed fundamentally. If anything the cash raise makes me more bullish long term
Adobe
Fuck yeah. I have a list of about 30 stocks in which I follow regularly. If I see there is a dip of 20% or more, I buy.
An example is Meta and Reddit.
I bought dips on ASTS most of last year. Port up 146%. Choose carefully.
Depends on what it is.
I bought PYPL back in the day and it dropped so I bought more. Lesson learned.
I bought Google when it was the cheapest Mag7, and it dropped on positive earnings and announcements. I bought more with conviction. Would do that again.
Mostly, I learned from PYPL and exit when I still have cash to exit with. But yeah if it’s a high conviction play with a really solid company that makes a boatload of money, I’ll double down or buy LEAPS.
Cut your losers and ride your winners.
Buddy the train keeps going. Inflation going up and money printer not shutting down, its invest or lose.
Fundamentals do not matter anymore. Haven’t for years
Doubled down on rklb, been in since 4$ seen it shoot 8-12$ back down, if its a company with good fundamentals and potential why not
If the company fundamentals are great still I’m not selling. I’ve heard to many old dudes at work over the years that said things along the lines of “if I didn’t sell Amazon/Microsoft/etc when I did I would be rich but I got out too early”.
Whether eggs are on sale or not I still buy eggs weekly. If they’re on sale maybe I buy extra.
Everything excited to buy over the next couple weeks with the slide. But going to divest from Sourh Korea index fund. North Koreas nukes make me nervous.
Fundamentals aren’t real. A company like AT&T has great fundamentals and has grown around 2% per year over the past 5.
You can tell who has and has not experienced a sustained bear market very clearly in this thread.
I have a trailing stop sell on all my stocks.
double downed on rklb, up 280%
Only in a general market meltdown.
Doubling down on NBIS right now
There’s always a reason a stock goes down and its usually not hard to find out why. If the fundamentals are unchanged, could be macro, the industry or the technicals that are overheated. Then you can look at other things like the short interest, insider selling or people taking profits.
If the dip keeps dipping you definitely need to reevaluate your understanding of the fundamentals and ask youself why it differs from what the rest of the market understands. But if everything keeps checking out, then its an undervalued stock which is a buy.
I’m still bullish on MVST but I’m only adding little bits until I see some more positive movement. Fundamentals seem fine, recent deals with car companies, and new chinese factory all look promising but even with positive news there’s been little upward movement of late.
Bullish on abat too but that won’t pay off for a few years yet imo
I buy the dip once. If it keeps dipping but I really believe in it, I wait for it to bottom out and if I am right, I will buy when it’s up about 10% from the bottom. Doesn’t always work, but it did for AMD, RKLB, UNH for me.
Price is what you pay, value is what you get.
ASTS, RKLB, LUNR & NBIS
RILY could pop in a week or 2 with there filings
theres a reason the stock price drops, the market is pricing in something. Maybe its wrong, maybe its right, but you got about a 50 50 chance of winning on that.
Ya I keep doubling down on gamb lol
It depends on the stock. I had a buy setup for meta when it dropped below $700 and then it went all the way down to like $620 and I tripled down. But with meta it is almost a guarantee that it will go back up.
Depends on how confident you are in your thesis. There is a fine line between delusion and quantitative research. Some people are emotionally attached because they want to justify their intelligence. I know I’ve made that mistake and let losers continue to lose because I didn’t want to go through the emotional journey of learning how wrong I was.
Nowadays I don’t take anyone’s advice. I only hold up to 4-6 stocks which I will deep dive into and monitor and keep adding when they’re down. I’d say if you’re not confident in your holdings you consistently cut losses on the way down. I used to work on a commodities trading desk and that was the rule we followed.
Lastly, Keynes is famous for saying “the market can remain irrational longer than you can remain solvent”. Don’t forget that!
If you are selling over 10 & 20% drops, you need to buy index ETF’s and lose your account password for 30 years
SFM tanked my whole portfolio last year. Lots of cash, still expanding their stores. A weak 3rd quarter earnings report and now they’re 50% down. I averaged down but couldn’t keep up. Sold half for tax harvesting.