No qualifying author-owned investment thesis was confirmed in this post.
no investment thesis
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First of all, there's nothing wrong with using ratios or indicators like P/E or RSI to evaluate whether or not certain stocks are worth buying or not. But it feels like this sub solely uses those metrics in a vacuum to make those recommendations.
Further, there seems to be a huge turnaround bias here. Yes, we are biased towards buying stocks that are going down instead of up because we are imagining the turnaround. Who doesn't love a bargain? Except when those bargains turn into lost opportunity costs.
Cheap stocks can get cheaper. Just because something's dropped by a ton doesn't mean that it can't stay in the dumps forever.
Even this sub's supposed hero, Warren Buffet has alluded to this:
*"Turnarounds seldom turn."*
*"It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price."*