What do you smell?
Do you recall that many stocks plunged 5%, 10%, and even 20%+ in one day in the last 3 months - many of them are great companies at a fair price before the sudden drop. It happened more often than usual that the price drop was based on insignificant news, and overreacted. Just name a few, NTE, OVTI, ASEI, AET. And it happend again yesterday on KOMG, and today on MATK.
All the names above are leaders in their market, with proven track record with at least 10%-15% organic annual growth, and to say the least, very reasonably priced even before the sharp price drop.
What does that suggest? To me, the market is irrational right now, and it makes every excuse to go down. Usually when the market is irrational, guess what's going to happen next? it goes even more irrational... So hold cash tight and be selective, don't buy just because it is fairly cheap, buy when it is dirty cheap, I am sure you will see plenty of them in the coming weeks.
I am not positive on the market outlook in the short term. But there are execptions:
energy stock - in short, I believe that energy price will go only higher in long term, and the recent price drop is a good chance. OIH (an energy ETF) around $130 is a good entry point in short term. For individual stocks, APA($65) and COP($62) are fairly priced now, some good entry points are around in the next 2 days if it goes down another 2-3%.
All the names above are leaders in their market, with proven track record with at least 10%-15% organic annual growth, and to say the least, very reasonably priced even before the sharp price drop.
What does that suggest? To me, the market is irrational right now, and it makes every excuse to go down. Usually when the market is irrational, guess what's going to happen next? it goes even more irrational... So hold cash tight and be selective, don't buy just because it is fairly cheap, buy when it is dirty cheap, I am sure you will see plenty of them in the coming weeks.
I am not positive on the market outlook in the short term. But there are execptions:
energy stock - in short, I believe that energy price will go only higher in long term, and the recent price drop is a good chance. OIH (an energy ETF) around $130 is a good entry point in short term. For individual stocks, APA($65) and COP($62) are fairly priced now, some good entry points are around in the next 2 days if it goes down another 2-3%.
posted by Siyu LI at
11:37 PM
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